Dean Klisura, Marsh's U.S. Risk Practices Leader, said: “Across lines of business, insurers priced risks competitively and retained a healthy appetite for new business. Although rates remained relatively stable, reductions were common in many lines. The size of global insurance market capacity remains very strong, but is more challenged in loss-affected regions.”
The effect of losses earlier this year meant that even property programs not affected by losses – but with catastrophe exposures – typically renewed with increases of up to 10 percent, while non-catastrophe exposed programs generally renewed flat. Insurance programs affected by losses also were more likely to experience rate increases.
In Japan, rates continued to rise significantly. On Japanese insurance programs with losses, rate increases were as much as 50 percent. On programs without losses, rates typically increased by 20 percent. For renewals in Australia, which suffered from flooding losses earlier in the year, increases of up to 5 percent were generally seen on programs without losses and not involved in mining.
Globally, most casualty business renewed either flat or with small decreases. For example, the North American casualty market remained predominantly flat. In liability lines of insurance, rates decreases were common. For directors and officers (D&O) liability insurance almost all major markets, with the notable exception of China, reported declining rates. Likewise, rates for professional indemnity insurance and for liability cover for financial institutions reduced in almost all major geographies.
The report also identifies the European sovereign debt crisis as another risk for insurers and reinsurers with exposure potentially coming through holdings in sovereign securities; corporate bond or equity holdings in exposed companies; or cash holdings.