Friday, 4 November 2011
Corporate insurance market still facing downward pressure says Miller seminar
The corporate insurance market faces long-term downward pressure on rates, according to a Miller Insurance seminar held this week.
According to Matt Grimwade of Miller’s Corporate Risk team it was clear from the speakers across the risk transfer industry, as well as the risk managers in attendance, that ‘there is still significant over-capacity in the market for UK multi-nationals, and that not even this year’s significant catastrophic losses will force price upwards.”
According to experts at the seminar, reinsurers’ bottom line was hit by the proliferation of recent natural disasters, but considerable excess capital remains.
While in certain lines of business and geographies this may increase pressure on pricing, the speakers agreed that it would take cumulative losses for 2011 in excess of $100bn to cause a significant market shift.
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The risk managers present were clear that there was considerable boardroom pressure on them to contribute to overall cost cutting by keeping premiums down.
With 30 quarters of falling prices behind them, insurance buyers are keen that there should be a measured approach to keep pricing broadly stable for a good while to come.
They were adamant that they will not be the victims of a knee-jerk reaction to recent natural catastrophes, but were keen to seek more collaborative—and long-term—relationships with insurers, with underwriters delivering more creative solutions and thinking about risk ‘in the round’.
Matt Grimwade continued: “The seminar highlighted many areas of difference and agreement. Everyone recognises that the various parts of this portfolio of risks are interdependent—but risk managers were clear in their view that they need to be fairly presented, and underwritten to their specific needs—not simply asked to accept price rises because of events elsewhere.”
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