BADEN-BADEN, Germany—Germany’s reinsurance market will see rates continue to decline for industrial property risks, but rates are expected to rise for commercial casualty business and auto liability on nonproportional coverage, according to Hannover Reinsurance Co.

According to a statement released at the annual reinsurance meeting in Baden-Baden, Germany, by E+S Rückversicherung A.G., the German reinsurance operations of Hannover Reinsurance Co., overall reinsurance market conditions are generally favorable in Germany.

“Conditions improved in 2009, not least due to the capacity shortage triggered by the financial market crisis,” Michael Pickel, a member of Hannover Re’s executive board, said in a statement. “Given the current state of the primary insurance markets, these conditions should at least be maintained this year.”

E+S Rück plans to be highly selective regarding industrial property business it accepts as prices are expected to keep falling on those risks, the reinsurer said. While a competitive climate for liability accounts is expected to continue on primary business, reinsurers are likely to increase rates so they are commensurate with the risks, Mr. Pickel said.

Rates on nonproportional auto liability business, a coverage E+S Rück acknowledged is an important part of its portfolio, are likely to rise, the reinsurer said.

Mr. Pickel said catastrophe pricing should remain stable unless demand for coverage increases due to changing capital requirements that could come from Solvency II.

E+S Rück said its catastrophe losses have been moderate this year, including €8 million ($12 million) in losses related to Winter Storm Klaus and the collapse of the Cologne City Archive.