Based on a reading of the June 30 renewals, underwriting markets remain soft, according to Bowring Marsh, the international placement arm of broker Marsh.
Depending on the class of business, premiums are down by 5% to 15% said Nick Bacon, chief executive officer of Bowring Marsh. Bacon spoke in an interview following a press briefing on Bowring Marsh's view of the market.
"Generally speaking, rates are still reducing," Bacon said.
Notable exceptions to this downward trend, Bacon said, include Chilean earthquake risks, where premiums are up by as much as 50% and more, depending on clients' claims experience in February's earthquake. At the same time, a drop in earthquake capacity in some European countries has driven "quake-only" business to London, Bacon said.
The June 30 renewals are important for business originating in both the United States and Asia, he said.
Property premiums in Singapore and in the wider Asian marketplace are down by 10% to 20%, Bacon said. Such dips are "sometimes a little bit more" than the London markets for this kind of business might be willing to accept.
"The marketplace now for international business in Singapore has grown quite substantially over the years," he said. "I think there are almost 70 markets in Singapore now in their own right."
Singapore-based insurers are eager to write regional business in Asia, Bacon said.
Despite the strength of the overseas challenge to London, Bacon said, London "is still the dominant market for international business." London now has to decide how strongly it wants to compete with Asia, he added.
In the coming months, Bacon expects the London market to see "perhaps a slight up and a down" in its market shares, mainly in the larger accounts.
For rates to increase, the insurance market would have to see a loss of such a size as to shake the confidence of capital providers. "There's a very high appetite for investing in insurance business still," Bacon said.
Bacon is taking a low-key view of the likely effects on the insurance sector of BP's problems in the Gulf of Mexico. Bowring Marsh, he said, is not involved in the offshore property market. But it does have some connection with products liability, which could involve oil well components. The extent of claims in this area is not yet known, he said.
Bacon outlined Bowring Marsh's ambitions in Asia, which, he said, is likely to become "more dynamic." Bowring Marsh is to augment its presence in Singapore and Tokyo with a Hong Kong office, to open on July 16, Bacon said.
"We think there is a market in Hong Kong for Asian regional business incoming," Bacon said. "And we also think being in Hong Kong will help us transact more reinsurance business, particularly from Southern China."