The stability of the global insurance sector and its ability to absorb massive catastrophe losses could signal a sharp increase in demand in the near future, Willis suggested in a report.
In its report, Marketplace Realities: Solid Footing and a Foundation for Growth, Willis reported flat to modest rate increases or decreases across major and specialty lines of insurance, with the exception of catastrophe-exposed property programs and employee benefits, which are experiencing notable price increases.
Insurance buyers heading into Q4 and Jan. 1 renewals will likely see a 7.5% to 12.5% increase in catastrophe-exposed property coverages, Willis said. Non-catastrophe exposed programs and executive risks will likely see rates stay flat or decline slightly. Casualty will likely experience light increases or flat renewals, the report says.
"Willis sees the stability of the current insurance marketplace as a harbinger of potentially explosive growth that the industry could experience around the globe in the next decade," the report says.
Joe Plumeri, Willis' chairman and CEO, said the industry's ability to absorb recent catastrophe losses, which could top $100 billion for the first time, indicates a readiness for a surge in demand for insurance and risk-related services.
The surge, he suggested, will likely stem from three sources:
• growth in the developing world, especially Asia;
• the potential decline of public insurance support through such programs as federal flood insurance, terrorism reinsurance and federal disaster aid; and
• a growing need for sophisticated risk management expertise as the risk landscape continues to evolve globally. Risks including cyber, environmental, political and supply chain feature prominently in this new landscape.