Marsh has forecasted that insurance rates for both UK property and casualty risks could fall by up to 10 percent in 2010. Speaking to a gathering of over 200 clients at the Marsh UK Annual Client Conference, Tim Pritchard, head of Placement for Marsh UK’s large corporate accounts, told delegates that competition for good risks remained strong, with plentiful capacity in both sectors.
“Insurers are looking to retain market share and are competing aggressively for good, well-managed risks,” Pritchard explained. “Combined with plentiful insurance capacity, rates in many classes of business have now fallen to the levels they were pre-2001. Having fallen 5 percent and 7 percent respectively so far this year, we expect UK property and casualty rates to fall by up to 10 percent next year.”
He also noted that more insurers had entered the market for casualty business. As an example, he cited stand alone employers’ liability insurance market, which now had 11 insurers writing this business, compared to three in 2003. He also said that there was now much more competition for environmental liability classes.
Pritchard added: “Competition for fleet motor business has remained strong and we expect rates in this sector to remain flat in 2010. Directors’ and Officers’ (D&O) insurance saw a spike in the first two quarters of 2009, especially for financial institutions where rates increased by up to 125 percent. However, the third quarter saw rate reductions of between 10 percent and 30 percent for non-financial institution D&O business and we expect to see rates fall further in the first half of next year.
“Companies that have not brought their insurance programme to the market for a few years would be well advised to do so now in order to take advantage of soft market rates. Good risks that have not come on to the market for several years are achieving significant savings, even beyond market trends.
“Insurers acknowledge that their loss ratios are lower because risk management within companies has improved. Although we expect 2010 insurance rates to remain soft, a mix of claims inflation and a diminished ability for insurers to release reserves means that the outlook for 2011 and beyond is tougher. Companies are well advised to embed, and be able to demonstrate, their risk management proficiency in order to maximise their ability to achieve the best possible deal from insurers.”
Source: Marsh – www.mmc.com or www.marsh.com
Topics Trends Pricing Trends
Was this article valuable?
Here are more articles you may enjoy.
Reserve Strengthening for Casualty Lines Not Over: Moody’s 
Berkshire’s ‘Most Important’ Biz Drives Q1 Results; GEICO Still Behind on Tech 
White House to Push Cybersecurity Standards on Hospitals 
Pfizer Agrees to Settle More Than 10,000 Zantac Cancer Lawsuits 
