BADEN-BADEN, Germany—European buyers of reinsurance can expect "stable" conditions at the upcoming Jan. 1 renewal, barring any major catastrophes, according to sources at the recent Baden-Baden reinsurance meeting.

Many participants at the meeting were "playing their cards close to their vests," noted Tom Wafer, managing director for international catastrophe business at Hamilton, Bermuda-based Harbor Point Ltd.

But the consensus among brokers and reinsurers was that there are unlikely to be large movements on European reinsurance rates. At the same time, reinsurance prices for U.S. catastrophe-exposed business are likely to increase because there have been rises in primary rates, noted Jean-Michel Lewis, director of reinsurance at broker Heath Lambert Group in London.

But international business should see rate decreases, noted Seymour Matthews, managing director of reinsurance at Heath Lambert.

"It is not the many paying for (the losses of) the few any more," he said.

"As far as European buyers are concerned, we don't see any major increases," Mr. Lewis noted.

Property rates are likely to increase very slightly at the renewal, according to Thomas Witting, head of Swiss Reinsurance Co.'s Central, Eastern and Northern European operations. "For the nonproportional business, we would talk about an increase in the higher one-digit percentage area," he said.

On proportional business, it is less clear what will happen to rates, given that primary results have generally been good recently, he noted.

"It is a quiet, normal renewal," said Wolfgang von Wasielewski, chief executive manager for Central and Eastern Europe at Munich Reinsurance Co.

The reinsurance market in Europe is "very stable" and it will be "an almost flat renewal depending on loss experience," according to Frank Schaar, executive vice president of Converium Holding Ltd.'s German operations.

Although for U.S.-exposed catastrophe business, the prices at July 1, 2006—which largely increased compared with Jan. 1, 2006—are being seen as a "benchmark," European buyers of reinsurance are likely to experience a flat renewal, said Frank Rieder, executive vp at Cooper Gay Steele & Co. Ltd. in New York.

Property catastrophe rates for Europe generally will remain stable, noted Adrian Clark, managing director at reinsurance broker Benfield Group Ltd. in London.

Rates for property catastrophe business in France, for example, are likely to remain stable or fall slightly, he said.

Generally companies in Italy, Greece and Israel will not see rate increases just because there are increases on U.S.-exposed business, because business is much more local, and there is plentiful reinsurance capacity, noted Giulio di Gropello, head of the Italy, Greece and Israel operations of Willis Re, a unit of Willis Group Holdings Ltd.

It is likely that some companies will seek to diversify in the coming months, he noted.

It will be interesting to see if some of the newer reinsurance companies —such as those set up in Bermuda in recent years—seek to diversify into lines such as European casualty business, noted Mr. Lewis.

Casualty rates will remain more or less stable, predicted Swiss Re's Mr. Witting.

Capacity is generally adequate in the reinsurance market, brokers said, with the only real "crunch" being for retrocessional cover.

The decision of Swiss Re not to continue the retro book previously underwritten by GE Insurance Solutions, which it acquired this year, has significantly reduced the amount of available retrocessional capacity, noted Mr. Lewis.

Some of the newer Bermudian companies are writing retro business, and in some cases industry loss warranties are taking the place of retrocessional cover, he noted.

Capital market solutions also could be "serious competition" to retrocessional capacity, he added.

If retro prices increase any further, the cover will be unaffordable, he said, and buyers will no longer purchase it.

The scarcity of retro cover will mean that reinsurers are even more careful about where they put their capital, said one broker who asked not to be named.