Commercial insurance buyers in all product lines should see rates rise moderately through the remainder of 2013, although commercial property rates for non-catastrophe exposed risks and some specialty lines may see slight reductions, according to global broker Willis in its 2013 Marketplace Realities report.
In an update to the annual report, Willis Group Holdings said in the commercial casualty lines, the top end of expected increases edged up from 7.5 percent to 10 percent since last fall.
For commercial property insurance, price expectations for catastrophe (CAT)-exposed programs shifted from flat renewals to slight increases.
For non-CAT risk programs, the expected price movement changed from decreases ranging from -5 percent to -10 percent to rates remaining flat or falling by up to -5 percent.
The report notes, however, that property programs affected by Superstorm Sandy can expect a complicated renewal process including restructuring of the flood language in their policies.
The specialty lines present a combination of price increases and decreases across product lines.
Willis expects rate declines in the aviation, health care professional, political risks and surety coverage lines.
Meanwhile, Willis believes rate increases can be expected in the fidelity/crime, kidnap/ransom, terrorism and trade credit lines.
Willis experts anticipate a mix of price increases and decreases in the energy, environmental and marine sectors.
In the employee benefits space, Willis says employers remain focused on the health care reform law that will go into effect in the next few years, particularly the pay or play excise tax. Rate increase estimates for 2013 remain at 8 to 10 percent, as insurers pass down the cost of compliance.
As for claims trends, Eric Joost, chief executive of Willis North America Specialties and senior editor of Marketplace Realities, says they are “generally more complex and volatile” than the fairly predictable insurance marketplace.
In the workers’ compensation as well as the directors and officers liability claims area, Willis experts see rising costs but declining frequency, while in property claims, they see a growing use of lawyers and consultants in claim resolution and an increase in advance payments on claims.
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