Casualty rates flat but expected to rise finds Airmic

Its Casualty Benchmarking Report 2012, based on feedback from members, also finds that terms and conditions were generally stable at last renewal with capacity readily available. However, Airmic members are concerned about the ease of appointing a broker for casualty programmes, policy delivery and compliance with local insurance regulations and tax laws. Of the 103 insurance buyers surveyed, 40% said that on a like-for-like basis casualty premium rates had not changed at the latest renewal. 34% reported a drop in pricing and 26% an increase.hide"These results confirm the picture painted by earlier benchmark surveys in other classes that the high level of losses paid by insurers during 2011 have not fed through into higher premiums. It remains a favourable market for buyers," said Airmic Technical Director Paul Hopkin. Airmic members said that there was plenty of capacity in the market and there is little difficulty in obtaining good security. Only 5% of respondents reported that casualty insurance capacity was scarce and/or limited at their last renewal. 68% were offered the same or similar terms and conditions as previously and only 10% witnessed a tightening. The remaining 22% said underwriters were flexible and open to extending the scope of cover, terms and conditions. Despite this bill of health delivered by and for UK buyers the report suggests that darker clouds are on the horizon. 61% of those surveyed forecast a price hike, compared to just 17% that foresee a reduction and 20% no change. 31% believe rates will increase between 5% and 10% with 29% forecasting a rise under 5%. The research also flags up other areas that concern UK casualty insurance buyers. 81% said that appointing an excess casualty broker is highly problematic. Airmic describes this number as 'staggering'. Less than a quarter of respondents report a problem-free broker appointment for motor cover, a line Airmic says is 'normally considered to be the least problematic commercial placement'. Nearly half of respondents said ensuring casualty policies are issued in a timely fashion is highly problematic and 40% said the same of maintaining compliance with local tax laws. Half of respondents said they are not being properly informed about insurers value proposition. "This means that their ability to choose between insurers does not account for added value services that might protect them or reduce the risks they are insuring against," said Lisa Williams, UK Head of Casualty at insurer AIG who sponsored the research. The Airmic survey suggests that around two-thirds of Airmic members value the support and advice on offer from external sources such as insurers but that the remainder looks to go it alone. 64% of organisations surveyed purchase support from brokers, insurance companies and consultants to deliver their risk and insurance activities. Airmic says this leaves a 'substantial' 36% who elect to use in-house resources or who simply do not carry out such activities. The Airmic study also found that nearly 90% of respondent organisations require at least AM Best A- (Excellent) or equivalent security from their casualty insurers and that companies in the pharmaceutical, food and drink, defence and energy industries are all among the biggest spenders on casualty insurance. Airmic conducted the online survey of its members in October of last year with its report published this week.

Casualty rates flat but expected to rise finds Airmic

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