P/C Market to See Only Moderate Changes in Rates in 2012: Willis

Property/casualty insurance rates will continue to be flat to with some slight increases or decreases in most major and specialty lines of insurance.

Some exceptions to that trend include catastrophe-exposed property programs and employee benefits, which are experiencing notable price increases, reports Willis Group Holdings in its 2012 edition of its Marketplace Realities report.

Highlights from the report include:

Property: The Property market was rocked by recent natural disasters and changes brought by RMS 11.0, the updated version of the leading catastrophe modeling tool. Catastrophe-exposed buyers are likely to experience increases of 7.5 percent to 12.5 percent in 2012, however, non-catastrophe exposed programs will see rates stay flat or decline slightly.

Casualty: In primary casualty, excess/umbrella casualty, workers’ compensation and auto lines, light increases or flat renewals are expected.

Executive Risks: Balancing the increases in casualty protection, the executive risks lines, including cyber, directors and officers, employment practices liability, errors and omissions, fidelity and fiduciary are expected to yield small decreases or remain flat.

Employee Benefits: Compliance with healthcare reform continues to be a costly burden for insurers and employers, contributing to an anticipated 10 percent to 12 percent rise in benefit plan costs in the year ahead.

Specialty Products: Predictions of slight increases in price are largely balanced by predictions of decreases in product areas ranging from aerospace to trade credit. As always, the quality of risk, and buyer submissions to the market, will make the difference in the final result.

The publication, which is updated semi-annually, is available at: www.willis.com/What_We_Think/Publications.

Topics Property Casualty Casualty