Pressures that could harden the property and casualty insurance market loom over insurance carriers entering into the final weeks of 2008, says a new industry report by the global insurance broker Lockton.
In its Fall 2008 Market Update, a snapshot guide to the latest trends and emerging risks confronting risk managers and insurance carriers today, Lockton says that while it is not clear that prices will harden immediately, insurance carriers face an ominous set of facts that could indeed turn the market as the end of 2008 approaches.
“In the first half of 2008 insurer profits declined 57 percent, the industry posted its worst first-half year underwriting performance since 2002, investment returns declined by 18 percent and net written premiums for the industry as a whole were stagnant. Catastrophe losses were double the average of the past decade,” reports Lockton.
Property, casualty, executive risks, aviation, energy, construction, real estate, employee benefits and other insurance and reinsurance markets including Lloyd’s are covered in the report. In addition, Lockton shares insights on potential technology liabilities and identity theft as well as the new Corporate Manslaughter and Homicide Act in the United Kingdom.
Rodger Laurite, Lockton senior vice president in Atlanta, notes that securities lawsuits are on the rise again. “Continued volatility in the financial markets could mean that litigation levels will continue to rise,” he writes. “Even though the D&O (directors and officers liability) market has been soft for most buyers, we recommend that clients use this time to prepare for their upcoming renewals. It is important that clients take steps to differentiate themselves so that they avoid being lumped in unfairly with their peers.”
“The energy insurance market, offshore and onshore, continues in a soft phase although there are signs that rating levels are flattening out. Other indicators point towards the first signs of a tightening market in specific areas,” writes Peter Leahy, Lockton managing director of Global Risks in London.
“The repercussions from the big hurricane losses and the meltdown in the financial markets are just beginning to be felt in the property insurance market. Insurance buyers should prepare themselves for a period of uncertainty and volatility in the property insurance market,” says Jim Rubel, Lockton executive vice president in New York.
To obtain free copies of Market Update, visit www.lockton.com.
Was this article valuable?
Here are more articles you may enjoy.