Marsh market reports reveal good news for insurance buyers

EMEA Competition among insurers continues to drive down rates across the EMA markets and capacity remains abundant, particularly for clients with attractive risks and good loss histories. Marsh said in its annual commentary that rates for motor insurance have remained stable or have reduced by an average of up to 10% in 25 of the 34 countries analysed across the region. Rates for directors and officers (D&O) liability insurance in EMEA remained stable, or average reductions of up to 10% were reported, in 32 countries. Only the Czech Republic and Russia experienced rate increases for D&O insurance in EMEA in 2014. Competition between insurers intensified across the EMEA region in 2014, placing further downward pressure on premium rates in an already soft market. International insurers are expanding operations into new geographies and also lines of cover as they scramble for new business, said the Marsh report, adding that this presents buyers with attractive risk profiles and good loss histories with the opportunity to secure premium rate reductions at renewal time.hideThe demand for cyber cover has increased in a large number of countries across the region, including Bahrain, Botswana, Denmark, Qatar, South Africa, Spain, Sweden, Turkey, the United Arab Emirates, and the UK, said the report, although insurance capacity to cover cyber risk varies substantially from country to country. Asia Asia remained broadly a buyer's market in 2014, with rates stable or decreasing in most lines of insurance throughout the region, said Marsh. In some cases, rate increases on certain classes of insurance were usually the result of specific local trends, market conditions, or loss experiences within a given country. The report noted that capacity and rates for non-catastrophe exposed property remained stable for most countries in the region, with this trend expected to continue throughout 2015. In the Philippines, non-catastrophe exposed property accounts with good loss experience are frequently renewed 'subject to expiring terms and conditions'. However, said Marsh, underwriters have been imposing stricter underwriting guidelines and acceptance criteria. They have also become more stringent when it comes to setting deductibles, and are reluctant to offer coverage enhancements/extensions. Furthermore, many underwriters have rejected underwriting exposures in high-risk areas, the report said. In most Asian countries, catastrophe exposed property rates remained stable or decreased, even in Japan, despite the heavy losses from the Tohoku earthquake in 2011. Earthquake capacity is readily available, and the rates continue to come down to the pre-Tohoku earthquake level, it noted. Marsh added that across the region, the financial lines marketplace has remained soft, mostly due to an abundance of capacity and competition among insurers. The report explained that in the operational power and utilities sector, a focus on natural catastrophe exposed risks remains a consideration with insurers giving much more attention to the technical quality of the risks, following several high-profile and expensive machinery failures. In addition, it said, client risk management practices in this sector have become a focal point for many markets. And the report noted that due to a new tariff introduced in February 2014 in Indonesia, continued market competition is expected in the general industrial risk sector - up to $300m in insured values for non-mining and non-energy risks. Latin America Insurance markets in the Latin America and Caribbean region were largely stable in 2014, similar to the preceding two years, according to the Marsh report. The majority of countries saw either flat or falling insurance rates. Marsh noted that Venezuela continues to be the most challenging market for insureds, with rising rates across numerous lines of coverage. Rate increases were also seen across several lines of coverage in countries such as Argentina, Brazil, Peru, Puerto Rico, and Uruguay. "Overall, insureds continue to benefit from the willingness of local and international insurers to provide innovative solutions to the growing economies of Latin America, as well as the capacity needed to keep insurance rates relatively stable - despite the increased demand for coverage in several lines," said Marsh. Looking at individual territories in Latin America, the report highlighted: Argentina Most coverage lines were stable. Rate decreases of up to 10% were seen for non-catastrophe-exposed property and directors and officers (D&O) liability coverage, while general liability and aviation rates dropped between 10% and 20%. Rates rose moderately (0% to 10%) for financial institutions, and increased between 10% and 20% for motor/automobile. Brazil Rates were stable for the majority of coverage lines. Rates decreased (0% to 10%) for non-catastrophe-exposed property risks amid the entry of new global insurers into the market. Rates increased 0% to 10% for financial institutions coverage, and between 10% and 20% for employer's liability and professional liability. Chile Chile again had some of the most favourable market conditions of any country in the Latin America and Caribbean region. Not a single line of coverage experienced a rate increase on average. Numerous lines of coverage - including general liability, professional liability, and marine - all saw rate decreases of up to 10%. The property insurance market continues to be soft, with rates decreases between 10% and 20% on average for coverage of non-catastrophe-exposed risks. Colombia Rate decreases of up to 10% were seen for general liability, catastrophe-exposed and non-catastrophe-exposed property, D&O liability coverage, and marine. Mexico Rate decreases of up to 10% were seen for general liability, non-catastrophe exposed property, marine, and aviation. Other lines, including environmental liability, D&O liability, financial institutions, and professional liability, remained stable. New environmental legislation has created a market for environmental coverage. Peru Rate decreases of up to 10% were recorded for workers' compensation, non-catastrophe-exposed property, financial institutions, and marine. Motor/automobile liability experienced rate increases of up to 10%. Other lines, including general liability, catastrophe-exposed property, environmental liability, D&O liability, and professional liability remained stable. The growing trend of foreign insurers entering the Peruvian market is expected to continue, resulting in a more competitive market, with broader coverages and products, and lower rates. Uruguay Most insurance lines remained stable, except for motor and environmental liability, which saw rate increases of up to 10%. Rate decreases of up to 10% were the norm for D&O liability. Demand for D&O liability coverage has increased due to a new law under which employers can be held criminally responsible for work-related accidents that affect employees. Venezuela Most major lines of insurance, including general liability, workers' compensation/ employers' liability, catastrophe-exposed and non-catastrophe-exposed property, and marine felt rate increases of up to 10%.

Marsh market reports reveal good news for insurance buyers

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