P/C insurance pricing in the United States to hit bottom of the trough in 2009: Marsh

Property and casualty insurance pricing in the United States is expected to hit the bottom of the trough in the first two quarters of 2009, with flat pricing for renewals being the norm.
“In the second quarter or second half of 2009, it is likely that single-digit percentage rate increases will be commonplace, with more placements increasing by the low double digits,” Marsh says in its U.S. Insurance Market Report 2009 Summary.
Treaty renewal rates in early 2009 were anticipated to range generally from flat to 10% increases.
Marsh notes the “U.S. property/casualty industry [has] proved relatively resistant to the global financial crisis in 2008.”
But signs of market hardening definitely exist. “A series of events, including the ongoing global economic crisis and an above-average number of catastrophic and non-catastrophic losses in 2008, has accelerated a shift away from the soft property insurance market of the past two years,” Marsh says.
The nature of the economic crisis will likely mean the hard market will evolve differently this time than at any other time over the last 50 years, the report says.
Marsh says a high level of catastrophes is leading in part to the hard market conditions. Catastrophes in the United States in 2008 led to an underwriting loss of US$19.9 billion through the first nine months of 2008.