April 10, 2013 by Canadian Underwriter
Commercial insurance buyers can expect moderate upward pressure on rates for the rest of this year, global insurance broker and risk advisor Willis Group predicts in its latest market report.
“The range of anticipated increases is moving slightly higher for most key product lines, although commercial property rates for non-catastrophe (CAT) exposed risks and some specialty lines may see slight reductions,” Willis said in a statement on the release of its 2013 Marketplace Realities report.
In commercial casualty lines, Willis said it now expects an increase of up to 10%, up from its 7.5% expectation last fall.
For commercial property, the company said it expects slight increases for catastrophe-exposed programs and flat or falling by up to -5% for non-catastrophe risk programs.
However, property programs that were affected by superstorm Sandy can expect “a complicated renewal process, including restructuring of the flood language in their policies,” Willis noted.
For specialty lines, Willis said it expects rate declines in Aviation, Health Care Professional, Political Risks and Surety coverage lines.
The company said rate increases can be expected for the Fidelity/Crime, Kidnap & Ransom, Terrorism and Trade Credit lines and a mix of price increases and decreases in the Energy, Environmental and Marine sectors.
The report also touches on overall claims trends in the various insurance lines of business.
“Our Property claim leader, Dave Passman, notes a growing use of lawyers and consultants in claim resolution, and at the same time increases in advance payments on claims,” Willis North America Specialties CEO Eric Hoost wrote in the report.
“Likewise in the D&O space, our claim expert Ken Ross identifies forces leaning opposite ways: some claim trends are rising while overall claim frequency seems to be falling,” Joost noted.
Key price predictions for 2013 include:
Property
Casualty
Executive Risks
Cyber
Benefits
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