Posted on 21 Apr 2009
Global insurance broker Willis Group Holdings (Willis) foresees a potential shift in the way business is conducted in the insurance industry as a result of the recent upheaval in the financial and insurance sectors. This is a central theme of the spring update to the group’s 2009 report, "Marketplace Realities and Risk Management Solutions", the long-standing annual series offering commentary and analysis on the insurance marketplace in every major line and select industry sectors. The report, subtitled "A Different Kind of Cat", is available on the Publications page of the Willis web site, http://www.willis.com/What_We_Think/Publications/.
The report indicates that despite all the ingredients for a hard market, the pricing cycle has yet to turn. Three reasons are cited: good industry results in 2006 and 2007, new marketplace entrants, and competition with AIG, whose competitors seem "overly focused, sometimes intensely so, on the possibility of wresting business away from the market leader." The analysis also notes that buyers are diversifying in a bid to mitigate counterparty risk, which reflects the “potential for a change in the way buyers and sellers interact in the insurance marketplace. Hard market or soft, we believe that buyers are more than ever looking beyond price and investigating the strength behind – the foundation beneath – the insurers they may want to buy from.”
The update to the 2009 report, whose inaugural issue was published in November, includes articles on market security, collateral, Casualty, Property, Workers’ Compensation, Employee Benefits, Directors & Officers, Fidelity, Cyber Risk, Construction, Surety, Terrorism and Lawyers Professional Liability. The publication is updated periodically throughout the year.