MarketScout released its barometer for the month of February, noting rate reductions among other topics.
According to Richard Kerr, chairman and CEO, of MarketScout, “The Lloyds and London Companies market is easing. Despite the almost $1 billion in January claims which will ultimately be spread among Lloyds syndicates, many insureds are securing 15 percent rate reductions on offshore energy packages, large property and excess liability placements. The U.S. market is making similar rate reductions resulting in an average rate increase of 9 percent, down from 11 percent in January.”
“As the world insurance market adjusts, we will begin to account for reductions in deductibles and retentions which are often negotiated in lieu of more aggressive rate reductions. For example, a 10 percent rate reduction coupled with a deductible reduction from $100,000 to $25,000 certainly reflects an overall rate reduction greater than 10 percent.
“To adjust for non premium bearing concessions, we will begin to factor in actuarially sound credits for lower deductibles and retentions. We will also consider significant coverage enhancements.”
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