Due to major losses and more demand for capacity E+R Rück expects rates to rise significantly
Next year’s reinsurance prices are expected to rise considerably, according to E+R Rück, the German reinsurer which is part of Hannover Re.
In a statement released at the Baden-Baden reinsurance event the company said it expects ‘appreciable price increases’.
This would be due to the recent major catastrophe losses and additional demand for capacity in some lines of business, according to the company.
‘In non-proportional motor liability reinsurance, too, we expect substantial rate rises owing to the reduction in the subject premium on the original market over a number of years and claims inflation for bodily injuries, although the extent of such increases will be crucially influenced by the individual loss experience,’ explained Michael Pickel, member of the executive board.
In the aftermath of winter storm Emma and hailstorm Hilal E+S Rück experienced claims amounting to EUR 62.0m. ‘The impact of "Hilal" was particularly significant. It was the second-largest such event in Germany after the Munich hailstorm of 1984,’ said the company in its statement.
The German reinsurer also said that bearing in mind soft premiums it would continue to write industrial fire business ‘extremely selectively’.
Turning to industrial casualty business, the company said it expected the competitive climate to remain. ‘It is our expectation that prices and conditions in this area will continue to be commensurate with the risks,’ added Pickel.
From a reinsurers perspective E+S Rück said that 2009 would offer ‘attractive business opportunities’.