Compounding of catastrophes in Q1 likely to cause hardening of global property rates: Aon

Japan’s recent earthquake and tsunami, combined with recent natural catastrophes in Australia and New Zealand in 2011 Q1, are likely to cause considerable pricing tension in the global property market, said Andrew Laing, property and casualty brokering team leader for Aon in the United Kingdom.
Laing spoke as a panel member during Aon’s webinar, Japan Earthquake and Pacific Tsunami Response, on March 23.
“While there is a lot of speculation about the ultimate size of the loss in Japan, it would seem clear the total of all international cat events in Q1 are likely to have some impact on pricing, if not across all regions, then certainly in the recently affected parts of the world,” Laing said.
One of the bigger unknowns, he continued, is the potential impact on contingent business interruption and contingent loss expense lines.
“Until we are clearer as to how the Japanese domestic insurers will respond and what treaty capacity is being purchased at Apr. 1, it’s difficult to assess what opportunities the global markets are likely to see and whether any tightening of terms for Japanese business will impact broader Asian business.”
Should the Asian domestic insurance market tighten, he continued, “more business will flow into the global markets and that is likely to attract a hardening of price.”