The property insurance market remained relatively stable and competitive in the first quarter of 2013, with few changes to limits purchased and deductibles, according to a benchmarking report from broker Marsh. Superstorm Sandy, which hit the Northeast in the fall of 2012, has “not been a market-changing event” in terms of rates, the report says, although it has prompted underwriters to closely scrutinize terms and conditions, particularly those related to flood and storm surge.
Marsh said 70 percent of its clients in the United States renewing their property all-risk programs in the first quarter of 2013 had no change in limits or purchased lower limits. The overwhelming majority – 84 percent – of clients renewing in the first quarter also had no change in deductibles.
Marsh said these trends are “consistent with a competitive property insurance marketplace, with some specific exceptions in the wake of Superstorm Sandy.” Changes in terms and conditions being sought by underwriters are generally limited to the Northeastern U.S. and elsewhere with significant flood exposures.
“The post-Sandy rate environment has, to date, been relatively stable, with the major effects of the storm coming in the form of changes to deductibles, limits provided, and policy definitions,” the report says.
Marsh said average renewal rates in the first quarter were up 3.8 percent for insureds without catastrophe exposures, almost flat for moderately catastrophe-exposed programs, and up 3.6 percent for insureds with significant catastrophe exposures.
The report was prepared by Marsh’s U.S. Property Practice in conjunction with Marsh Global Analytics, Benchmarking Center of Excellence, which provides purchasing patterns and pricing behavior analytics to Marsh clients and the insurance industry.
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