January 18, 2005 by Canadian Underwriter
In its “International Liability Market Review”, broker Willis says predictions that the liability market would see flat to declining pricing in the second half of 2004 were borne out. But the 10-15% declines in liability pricing paled in comparison to property reductions on the order of 30% for some accounts.
There remains substantial variation in the treatment of different classes of business or geographical regions, but overall the liability market peaked in the first quarter of 2003, while the property market peaked in mid-2003, the report notes.
The Asian market has remained more competitive than that in Europe, while international writers, specifically in London are showing increased interest in risks out of Central and South America. Pharmaceutical, energy and railway sectors continue to see firm pricing, as do accounts with U.S. exposures or those purchasing high limits. Capacity, generally expected to increase moderately, will be reduced for pharmaceutical risks exposed to the U.S. legal system, Willis reports.
In terms of emerging risks, following on the heels of asbestos and silica, the industry is now backing away from risks where the substance methyl-tertiary butyl ether (MTBE) an additive to gasoline is present, as well as responding to recent legal action based on welding fumes in the U.S.