Property: After increasing property rates for the first two quarters of 2009, especially for natural catastrophe-exposed portfolios, property rates in the third quarter were generally flat. Property experience for most carriers in 2009 has largely been positive and surplus/supply remains strong and improving for the industry. For the remainder of 2009 and 2010, we expect rates to be stable with some downward pressure.
Casualty: Average rate decreases remained in the low single digits through the third quarter for most casualty lines. The vast majority of insureds continued to purchase similar limits and maintained existing deductible/retention levels year over year. Barring any unforeseen events, the casualty market will continue to experience soft conditions with the majority of insureds seeing flat to single-digit rate decreases. Casualty carriers continue to be challenged to grow net written premium and are aggressively seeking to acquire and retain insureds. As a result of heavy competition, coupled with a reduced exposure base, insureds are expected to experience lower premiums in 2010.
D&O: Overall, D&O rates decreased 2.7 percent in the third quarter. Furthermore, pressure eased for the Standard & Poor's financial institutions sector, which includes banks, diversified financials, insurance and real estate. After double-digit increases in each of the previous four quarters, pricing in that sector increased by only 3.2 percent in Q3 '09. All other S&P industry sectors were down an average of 4.9 percent in Q3 '09. D&O capacity has increased. Several new underwriters have entered the field and a number of carriers, previously weakened by the economy, have recovered.
"Staying fully informed about industry trends is essential to remain competitive and relevant in today's global market," said Warren Mula, chairman of U.S. retail for Aon Risk Services. "With access to real-time data such as that shared in Aon's Quarterly Market Overview, our clients can control costs and apply forward-thinking insights to help them make the right decisions for the future."
Methodology: Aon Analytics U.S. Q3 '09 Quarterly Market Overview
This report on property, casualty, directors' and officers' liability lines is based on data from Aon proprietary databases such as the Aon Global Risk Insight Platform(SM). Results represent placement of commercial and large account information from thousands of U.S. companies. Aon GRIP(SM) is the world's leading global repository of global risk and insurance placement information and provides fact-based insights into Aon's global premium flow. Aon Analytics collected and tabulated the results, provided analysis and interpreted findings.
To access the Aon Analytics U.S. Q3 '09 Quarterly Market Overview for Property, Casualty, Directors' and Officers' Lines, visit http://www.aon.com/quarterlymarketoverview