Canadian commercial lines likely to see flat pricing in 2011 Q3: Marsh

Overall Canadian market conditions remain favourable across most commercial lines through the end of the 2011 Q2, but signs of a firming market are beginning to appear in segments of the marketplace, according to Marsh.
In its Canadian Insurance Market Midyear Update, Marsh examined data from transactions brokered by Marsh through early July 2011.
The report’s findings suggest the majority of commercial property, casualty, and financial and professional insurance buyers are not experiencing significant rate increases.
Property insurance rates are increasing in individual sectors such as energy and mining, and 2011 catastrophe losses could further affect rates for some buyers.
In the mining sector, specifically Canadian companies with operations outside of Canada, Marsh anticipates overall rate increases of between 5% and 10% in the second half of 2011, with a potential increase of as much as 20% for insureds with catastrophe exposures and poor loss records.
In the first half of 2011, most upstream energy exploration and production property risks were subject to rate increases of between 5% and 10%. But control-of-well general liability rates remain fairly flat.
Underwriters are also starting to look more closely at contingent business interruption and contingent exposures following the Alberta wildfires. They are requiring more information from insureds before offering such coverage, the report says.
On the other hand, in financial and professional lines, including directors and officers liability, insurers are offering broader coverage options as they seek to expand their market share.
“It is too early to tell if the second half of the year will bring any overall increases to commercial insurance rates in Canada,” said Alan Garner, president and CEO of Marsh Canada Limited.
“Marsh expects that pure Canadian commercial accounts will see rates remain flat well into the third quarter of 2011, and possibly beyond.”