Global property rates continue to firm
by Gill Montia
Story link: Global property rates continue to firm
Global property insurance rates continued to firm in the first quarter of 2012, according to Marsh.
Despite the absence of major natural catastrophes during the first three months of the year, rates rose for both catastrophe-exposed and non-catastrophe exposed risks in most geographies.
The leading driver of change is the catastrophe losses experienced by insurers in 2011, according to Marsh, and the effects of these losses are also being felt in key risk areas, such as contingent business interruption, where insurers globally are taking a more cautious approach and asking for detailed information before underwriting the risk.
In addition, changes implemented in 2011 to the risk models used by insurers could fuel property rate increases in the first-half of 2012.
Other major trends identified in the first quarter include:
An increased demand for trade credit insurance across all geographies due to continued unease over the creditworthiness of companies in the Eurozone.
This trend was most notable in Asia, where demand for trade credit insurance increased by up to 60% in the quarter.
A deterioration in the underlying trends for US workers’ compensation insurance, as the frequency and severity of claims continues to grow.
A continuation of last year’s trend in China, where directors and officers insurance rates for companies with US exposures typically saw significant increases: in the first quarter of 2012, rates rose on average between 20% to 50%.