According to the Aon’s newly launched “Market Pulse,” underwriters expect motor [auto] insurance premiums for UK companies to increase in the first quarter of 2009. Aon said its new quarterly index “will track UK underwriters’ premium predictions for property, liability and motor fleet insurance. The insurers surveyed underwrote £23.5 billion [$33.5 billion] worth of premiums for UK companies in 2008.
“Movement in motor fleet premiums is a strong indicator of how other types of insurance are set to follow,” said the bulletin. “Aon’s research supports this with 74 percent of underwriters believing property rates will increase in the next three months and 69 percent expecting liability premiums to also rise. Insurers are looking to make up for three to four years of offering competitive rates. Now, poor profits, the rising cost of claims and the challenges of the tough economic environment are driving the expectation of rate increases in 2009.”
Steve Redgwell, head of broking director for Aon’s mid to large sized UK companies, added: “We are hearing very strong messages from insurers about rates rising but these have not yet manifested themselves into actual increases.
“However, UK companies must be aware of and prepare for the imminent shift in insurance market conditions that could affect their cover and premiums. For example, we are already seeing challenges in capacity available for certain industries, such as the food sector. Also, insurers are placing greater attention over the commitment and focus of businesses on the management of risk where the trend is that of a high volume of losses, such as in the retail sector.
“But underwriters are still hungry for new business and it is possible for companies to achieve highly competitive rates, as long as businesses can evidence that they are committed to and have a culture of good risk management. Insurance brokers must continue to work with their clients and insurers to provide the quality of information they need to obtain broad and competitively priced cover for UK companies. This especially rings true as, when we look further ahead, 92 percent of underwriters expect liability rates to rise over the next six months so good insurer relationships are crucial in helping keep rates down at a time when companies need to control costs.”
Source: Aon – www.aon.com
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