Insurance rates up globally but down excluding US – Marsh

Excluding the US, rates decreased on average by around 1%. Overall global property rates were down by 0.2% on renewal but casualty insurance prices rose by 0.7%. The increase in liability rates was much contributed by concerns over the eurozone's economic woes. The region's financial institutions generally faced increases of up to 10% for liability cover in Q1. By contrast, rates in other liability lines, and for financial institutions outside the eurozone, were generally either stable or declined during the first quarter of this year, said Marsh.hideThe continued firming of global insurance rates in the first quarter of 2013 follows a trend witnessed over the previous 18 months, according to figures released in Marsh's latest Global Insurance Market Quarterly Briefing. The data, based on the Marsh Risk Management Global Insurance Index that represents a composite or weighted average of rate change activity over the preceding four quarters, shows a fifth consecutive quarter of global average rate increases. During the first quarter, the index, which was based at 100.0 in the second quarter of 2012, rose by 0.1 points to 101.3. This translates to the uptick in renewed global insurance rates of 0.3%, following an increase of 1.2% in the fourth quarter of 2012. But changes varied by lines of business and geography. In North America most major insurance lines recorded increases of between 2% and 4%, heavily contributing to the small rise worldwide. For liability insurance, financial institutions in the eurozone continue to face increases. Pricing was up between 0% and 10% in all the region's countries tracked by Marsh-France, Germany, Italy and Spain. Peripheral eurozone players Turkey and Russia saw increases of up to 10% and 20% respectively. Financial and professional lines renewed up 0.8% globally. Rates for directors and officers' liability were generally stable or declined slightly. However, in the US, there has been some tightening for small-cap companies, driven by mergers and acquisitions (M&A) involving small-cap and mid-cap companies, that has led to litigation and claims activity. But for general liability, rates decreased between 0% and 10% in Germany and the UK in the first quarter of this year. Spain witnessed stronger softening of between 10% and 20% with France facing stable renewals. In Italy though rates hardened on average by up to 10%. Increased capacity was seen again in Q1 for property catastrophe risks, stifling the efforts of some insurers to secure rate increases, said Marsh. Some larger insurers showed a much greater appetite for this risk and are looking to expand market share, it added. Globally, rates for catastrophe-exposed property risks stabilised in most major markets, including in countries where there have been major losses in recent years. Rates in both Australia and Japan began to stabilise after several quarters of rate increases. By contrast, in Thailand, significant reductions are being achieved of up to 50%. However, rates remain higher than they were before the major Bangkok floods. In the US, property rates for moderately catastrophe-exposed programmes-those of up to 30% of values-typically renewed either flat or with increases up to 10%. However, rate increases of more than 10% were more usual in the US northeast, following the effects of Superstorm Sandy and Hurricane Irene. Overall, rate stabilisation in the US may reflect the fact that rates have been rising steadily for some time in the more catastrophe-exposed parts of the country, such as Florida, and have now reached a plateau, noted Marsh. But rates for cat-exposed property in many European countries increased. They were up between 0% and 10% in Germany and the UK and by 10% and 20% in Italy. In France though, they were stable. Speaking in general on the global insurance market Marsh said: "Underlying these market conditions is very strong capacity and increased support for business among some global insurers for both catastrophe- and non-catastrophe-exposed property risks." Globally, continued availability of capacity and strong competition have led to stable conditions overall, it added.

Insurance rates up globally but down excluding US – Marsh

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