SINGAPORE, Oct. 6, 2011 (ANTARA/PRNewswire-Asia-AsiaNet) --
Market fundamentals remain strong;
Catastrophe-exposed risks faced tougher renewals
While catastrophe-exposed risks experienced tough insurance market conditions, pricing decreases in other lines of business fostered a stable rate environment over the last three months, according to Marsh's Insurance Market Update Third Quarter 2011(
http://usa.marsh.com/Insights/GlobalIMR/IMRContent/articleType/ArticleView/articleId/12594/Insurance-Market-Update--3rd-Quarter-2011.aspx
). Overall, despite significant insurance losses in the first half of the year, insurers have remained competitive but cautious. Marsh, the world's leading insurance broker and risk advisor, is a wholly-owned subsidiary of Marsh & McLennan Companies.
Geoff Lambrou, Managing Director and Head of Placement for Marsh in Asia, said: "Across lines of business, insurers priced risks competitively and retained a healthy appetite for new business. Although rates remained relatively stable, reductions were common in many lines. The size of global insurance market capacity remains very strong, but is more challenged in loss-affected regions."
The effect of losses earlier this year meant that even property programs not affected by losses -- but with catastrophe exposures -- typically renewed with increases of up to 10 percent; non-catastrophe exposed programs generally renewed flat. Insurance programs affected by losses also were more likely to experience rate increases.
In Japan, rates continued to rise significantly. On Japanese insurance programs with losses, rate increases were as much as 50 percent. On programs without losses, rates typically increased by 20 percent. For renewals in Australia, which suffered from flooding losses earlier in the year, increases of up to 5 percent were generally seen on programs without losses and not involved in mining.
Globally, most casualty business renewed either flat or with small decreases. For example, the North American casualty market remained predominantly flat. In liability lines of insurance, rates decreases were common. For directors and officers (D&O) liability insurance almost all major markets, with the notable exception of China, reported declining rates. Likewise, rates for professional indemnity insurance and for liability cover for financial institutions reduced in almost all major geographies.
The report also identifies the European sovereign debt crisis as another risk for insurers and reinsurers with exposure potentially coming through holdings in sovereign securities; corporate bond or equity holdings in exposed companies; or, cash holdings.
About Marsh
Marsh( http://usa.marsh.com ), the world's leading insurance broker and risk advisor, teams with its clients to define, design, and deliver innovative industry-specific solutions that help them protect their future and thrive. It has around 25,000 colleagues who collaborate to provide advice and transactional capabilities to clients in over 100 countries. Marsh is a member of Marsh & McLennan Companies( http://www.mmc.com ), a global professional services firm with 52,000 employees worldwide and annual revenue exceeding $10 billion, which is also the parent company of Guy Carpenter( http://www.guycarp.com/portal/extranet/index.html?vid=77 ), the risk and reinsurance specialist; Mercer( http://www.mercer.com/home ), the provider of HR and related financial advice and services; and Oliver Wyman( http://www.oliverwyman.com/index.html ), the management consultancy. Its stock (ticker symbol: MMC) is listed on the New York, Chicago and London stock exchanges. Follow Marsh on Twitter @Marsh_Inc( http://twitter.com/@Marsh_Inc ).
SOURCE: Marsh
Editor: PR Wire
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