Property - "Putting the brakes on price reductions"
Large catastrophe losses and the prospect of poor investment returns are creating more difficult property insurance market conditions for commercial insurance buyers, according to the Lockton Market Update.
Insurers "have put the brakes on price reductions in the property catastrophe market and are raising rates as they reduce capacity," says Jim Rubel, Director of Property and Energy Insurance for Lockton in New York in his report. "For catastrophic risks, market conditions are now difficult, meaning that buyers could face dramatic price increases. Even so, this is not yet a true hard market, where capacity is not available at any price. It may not take much more, however, to trigger a hard market."
Casualty - "Market in transition"
The casualty report indicates increasing signs of pricing pressure for casualty and liability insurance, but the overall pricing environment for the moment favors insurance buyers.
"It would certainly be premature to discern any clear sign of a hardening market, but 2011 could yet end up looking like a year of transition for the casualty market," says Tony Hardy, leader of Lockton's Global Casualty team in London, in the report. "Buyers would be well-advised to engage with their markets early in the renewal process to avoid any unpleasant surprises on rates or retentions, particularly if their claims experience has deteriorated over the past few years."
Executive Risks -- "Soft market is showing its age"
"As 2011 draws to a close, the soft insurance market for financial and executive risk insurance lines is beginning to show its age," says Lockton's William Boeck in the U.S. executive risks report. "Whether the current renewal environment is a harbinger of across-the-board premium increases remains to be seen; however, underwriters are trying to raise them where they can."
Chris Hewitt, an executive risks expert for Lockton in London indicates the global executive risks insurance outlook remains relatively competitive in his global report. "Primary D&O rates can be expected to remain flat for the foreseeable future."
Construction - "Pricing under pressure"
Construction firms, architects, and engineers are starting to see rising insurance prices in specific sectors, according to the latest update on the commercial insurance market for construction firms and architects and engineers.
Said Lockton experts Jamie Knoop, Paul Primavera and Jody Wright in the construction report, "The market is clearly firming in chosen segments and geographies, and while most would hesitate to predict a 'hard' market, pricing is under pressure."
The Lockton Market Update is available free. The newest update includes reports on 20 insurance and employee benefits markets globally, including trade credit, healthcare, private equity, aviation, product recall, and energy.