Posted on 20 Apr 2010
In its newly published Lockton Market Update, global insurance broker Lockton says that commercial insurance buyers continue to benefit from lower prices and steady or increasing insurance capacity in property and casualty markets. The U.S. employee benefits marketplace is much more turbulent in light of the recently enacted health reform law.
Lockton's online update includes snapshots of 32 markets showing the latest trends facing risk managers, chief financial officers, human resources leaders and other executives.
Lockton reports that U.S. P&C insurers are seeing profits rebound with fewer catastrophes in 2009 and increasing investment returns. Competitive pressures are benefitting buyers who have more choices in the market.
Highlights from the report include:
* Casualty -- Mark Moreland of Lockton's Risk Management team explains that the environment is increasingly forcing buyers to market their business to attain the best deal. "Carriers have consistently generated solid retention rates over the past several years, but they may be asked to concede more today to retain the business given the dynamics of the marketplace. These conditions set up a very favorable environment for buyers."
* Financial and Executive Risks - Lockton's Gary Phillips and Rodger Laurite report that Director's and Officer's, Employment Practices Liability and Fiduciary insurance markets show no signs of hardening. They write that "there are exceptions and differences depending on public versus private, large versus small, financial institutions versus commercial risk, but the theme for most risks, with the exception of some financial institutions, is general stability and softness."
* Property -- Jim Rubel of Lockton's Global Property Practice observes that insurers are choosing to lock in what business they can, even at a discounted price, rather than hold the line on price and lose good business to a competitor. "Natural catastrophes are the wildcard in this equation," Rubel adds. "As certain insurers reassess their risk appetites, they are cutting capacity primarily on accounts with exposure to natural catastrophes. New players have emerged in the primary property insurance marketplace to help mitigate these capacity constraints, and, so far, there is still adequate capacity to complete renewals with favorable renewal terms and conditions."
* Employee Benefits -- Ed Fensholt, JD, of Lockton Benefit Group comments that the health reform law is causing firms and insurers to re-evaluate their programs. Fensholt cautions against hasty decisions, adding "Your first step is to take a deep breath. There is a lot of information to absorb in this new law. We expect specific guidance on the law in the coming weeks, and we are still early in the process." Lockton is hosting free Health Reform Summits with practical insights for employers.
The report also provides in-depth analysis of global insurance markets, including aviation, international casualty, international property, financial risks, and cyber liability.
To obtain free copies of Market Update, visit http://www.locktonmarketupdate.com or contact your local Lockton office.