Competition keeps property insurance premiums from rising: Marsh

Property insurance rates generally fell or remained stable in the second quarter of 2013, while directors and officers (D&O) liability rates generally increased in Canada, suggests a report released Wednesday by Marsh Inc.

“Increased capacity and competition among insurers and low losses from catastrophes generally kept property premiums from rising in the second quarter,” Marsh stated in its Global Insurance Market Quarterly Briefing for the second quarter of 2013.

“Flooding remained the most problematic catastrophe peril for insureds and underwriters in many regions, as demonstrated by recent events in Germany and elsewhere. Although some high-profile tornado events in the first half of 2013 in the U.S. put a spotlight on that risk for insureds, relatively low dollar losses limited the impact on the commercial insurance markets.”

Outside the U.S., Marsh noted, “rates typically fell between 1% and 3%, resulting in a decline in the Marsh Risk Management Global Insurance Index for the first time since its inception six quarters ago.”

The report included a chart depicting “typical rate changes,” in 23 different markets, in four different categories of liability insurance: general liability, D&O, financial institution and professional liability.

In Canada, the typical rate changes in general and professional liability were stable, at -5% to +5%, while typical rate changes for D&O and financial institution liability were an increase of 0% to 10%.

“In most major markets, D&O liability insurance rates either remained stable or fell in the second quarter,” Marsh stated in the report. “For errors and omissions (E&O) insurance, capacity remained generally abundant across professional liability lines, driving competition and generally keeping market conditions favorable for insureds. Although the overall market was flat, conditions could vary significantly based on an individual organization’s industry and business specifics.”