September 14, 2009 by Canadian Underwriter
The U.S. property and casualty commercial sector continues to resist sharp rate increases for Directors & Officers insurance seen in the financial institutions sector, with the average premium for commercial business falling 5% in 2009 Q2, according to a new survey from Willis Group Holdings(NYSE:WSH).
The 5% percent reduction is for commercial clients with strong risk profiles, Willis says. “Reductions are smaller for those more directly impacted by the financial downturn or with highly leveraged balance sheets, and some may even be seeing slight increases in premium,” Willis says in a press release announcing the results of its Willis D&O Index. “This compares with double-digit percentage premium increases levied on financial institutions during the second quarter, as the fallout from the credit crisis continues.”
Willis says that, based on feedback from the London market, it expects “the commercial sector will see continued small reductions over the next three months.”
The Willis survey also found the U.S. commercial market continues to benefit from significant capacity for business domiciled outside of the United States, with new entrants into the market providing significant excess competition.
“It also shows that the fallout from the banking crisis has yet to filter through into significant claims,” Willis reports.