Friday, 13 January 2012
Plentiful capacity for global insurance market in 2012
The good news for insurance buyers in 2012 is that capacity in the global insurance market remains plentiful and across-the-board rate rises are not being seen, despite the record insured catastrophe losses of more than $100bn in 2011.
Dean Klisura, US Risk Practices Leader, Marsh
This is according to Marsh in its Global Insurance Market Quarterly Briefing: Q4 2011.
The picture is not so good for most loss-affected geographies and classes of business, where global insurance rates continued to climb in the fourth quarter of 2011.
Insurers are seeking rate increases on accounts with significant losses and catastrophe exposures, said Marsh, pointing out that almost half of Marsh’s US property insurance clients experienced rate increases at renewal during the second half of 2011, compared to 31% in the first half.
Please sign up here to our full-time mailing list to ensure that you receive our weekly newsletter.
Nevertheless, rate decreases are still achievable in many lines of business, according to Marsh.
While most of the rate increases were applied to programmes with catastrophe exposure, accounts with little or no such exposure or losses were often able to secure rate decreases during the second half of the year, the report said.
“The global insurance market remains well-capitalised and generally competitive,” said Dean Klisura, US Risk Practices Leader, Marsh.
“This year’s record catastrophic losses are resulting in price firming around catastrophe and loss-driven accounts, but there has been no overall change in market pricing. Market fundamentals remain generally strong.”
Not surprisingly, countries affected by major catastrophe events during the year saw the largest property catastrophe rate increases in the quarter.
In Japan, programmes with earthquake risks typically renewed with increases of up to 50%. In Thailand, programmes are renewing with increases of up to 30%.
Globally, employee benefit costs increased significantly during the quarter as a result of higher medical costs, said the report.
In India, for example, employers experienced 20% rate increases in the quarter. Rates for directors’ and officers’ liability insurance in large emerging markets, such as China and India, continue to rise, while rates in all other major markets remain stable or are declining, said Marsh.
Please sign up here to our full-time mailing list to ensure that you receive our weekly newsletter.
Risk transfer industry must better prepare for intangible asset losses—JLT
Multinational business leads growth as brokers report mixed first quarter
Threat to business from terrorism and political violence continues to rise
Risk managers and brokers need to sharpen up global programmes act
Corporate round-up
Corporate round-up
Airmic steps in as contingent commissions raise their ugly head
JLT reports strong 2011 figures but falters in southern Europe
Corporate round-up
Aon backs web-based placement platform Inex 24
Corporate round-up
Insurer financial strength rating key metric for brokers
Big three brokers revenue up 17.5% but Willis ‘not satisfied’ as it lags behind
Corporate round-up
JLT expands reach in Spain as it combines with Unipsa
Companies need to step up data security management urges German broker
Marsh forecasts rising rates for loss hit EMEA risks
Gras Savoye's new organisation strengthens Willis ties
Broker focuses on risks of Iranian nuclear plans
Chartis and Marsh appoint Schimek and South to lead European operations
Aon Corp relocates headquarters to London
