ProgramBusiness
 
  


Loading LiveCycle Banners.
  1. News Articles
  2. Related News Articles
  3. Comments
News Article Details

Willis: 2011 Power Market Review Shows Hard Market Has Not Arrived Despite Heightened Losses

Source: Willis

Back | A- | A+
 Email This     Print     Subscribe


Posted on 08 Dec 2011

With 2011 set to close as the worst year on record for natural catastrophe events and against the backdrop of ongoing civil unrest in the Middle East and a deepening economic crisis in the Eurozone, the annual Power Market Review, published by Willis Group Holdings, the global insurance broker, reports that the onset of harder insurance market conditions is currently being restrained by overcapitalisation and the absence of a ‘game changing’ event that would fundamentally alter market expectations and behaviour.

The report, released today, observes that 2011catastrophe losses have had a predictable impact on underwriting results, with many insurers posting significant underwriting losses in the first nine months of the year. Together with changes in underwriters’ ‘cat’ models, this has had an effect on the cost and availability of ‘cat’ capacity, with an expectation of further development over the 1 January reinsurance renewal season. However, this has not translated to a general market hardening.

The report notes that the power sector of the market has seen a continuation of ‘attritional’ losses during 2011, and also been hit by three ‘mega claims’, defined as claims in excess of USD 100m, but remains well capitalised. Global underwriting capacity for the power sector remains close to USD 4bn taking the combined market segments (specialist power, general property markets and mutuals) into account.

Commenting on the report’s findings, Graham Knight, Managing Director of the Willis Power Practice in London, said, “There has been no meaningful change in the amount of capacity available for the power sector in the last 12 months. There are, however, increasing signs of change in risk appetite. The general insurance market is still reasonably well-capitalised, and the outcome of the forthcoming 1 January treaty renewals will signify to a large extent the direction of the market in 2012.”

Highlights of this year’s report include:

• General overview of power sector claims in 2011 and their impact on the market;
• Focus on the Asia Pacific power market;
• A series of special reports including an engineering study of generator life cycle management and a report on the potential use of captive insurance companies in the power sector;
• Developments in the niche power areas of Renewable Energy, Nuclear and Mobile Power;
• Reports on the state of different insurance market sectors, including Liability, Terrorism and Political Violence, and Construction.

The report further features contributions from a variety of external industry specialists, including a leading London lawyer, a loss adjuster and a forensic accountant, and the UK head of power and utilities business at Ernst and Young.


Comments

Post a Comment
If you are a Storefront / Tradingfloor user, click here to login.
Note: As a guest user, please fill out the form below to post a comment.
Post your comments here.
Name :
Email Address :
Captcha :
Comments :
Character left : 2000