Further Firming Expected in US Commercial Insurance Market in 2013: Marsh
31 1월 2013 - 1:00AM
Business Wire
US commercial insurance rates are expected to continue firming
in many lines of business and industry sectors in 2013 as above
average losses, subdued investment returns, and receding reserve
releases impact insurers, according to a comprehensive report
published today by Marsh. However, traditional signs of a
conventional hard market are not evident as price increases are not
uniform, capacity is plentiful, and competition among insurers
remains intense, Marsh said in its US Insurance Market Report
2013.
Superstorm Sandy’s effect on the property insurance market will
likely temper what had been a generally improving rate environment
for property insurance buyers in late 2012, Marsh said. Though the
full effects of the storm are still being determined, decreases in
property insurance pricing generally are unlikely in early
2013.
Casualty insurance markets remain in a state of transition
entering 2013, though pricing trends will likely be felt unevenly
across various lines of business and client demographics. Rates for
financial and professional insurance — including directors and
officers liability (D&O), commercial errors and omissions
(E&O), and cyber insurance — are also expected to generally
increase in 2013.
“Although Superstorm Sandy will rank as one of the costliest
storms in US history, it is not forcing a rapid hardening of the
overall market as insurers’ capital positions were strong enough to
weather the storm,” said David Bidmead, Marsh’s US CEO. “But the
storm has prompted underwriters to seek clarification of certain
definitions and other language in property policies. In the
Northeast and other regions that they did not previously perceive
to be catastrophe-exposed, property insurers are also reconsidering
their underwriting approach and seeking higher rates and tighter
terms and conditions.
“Many of our clients will face challenging renewals across
several lines and industries in 2013, as insurers continue to
adjust their pricing and coverage offered to maintain
profitability. Clients that effectively differentiate themselves
from their peers by providing complete underwriting submissions
with accurate and high-quality data will be best positioned to
secure more favorable terms, conditions, and pricing where
possible.”
Marsh’s annual US Insurance Market Report provides detailed
information on commercial insurance market trends and risk issues
for all major classes of business and more than two dozen industry
and specialty lines. Other major findings from the report
include:
- Insureds with significant catastrophe
exposures renewing programs in the fourth quarter of 2012 typically
saw property rate increases of 5% to 15%.
- The general liability insurance market
was generally stable in 2012, with some moderate firming. Rates at
renewal in the fourth quarter typically ranged from 5% decreases to
5% increases.
- Workers’ compensation rates generally
renewed in the range of 5% decreases to 5% increases in the fourth
quarter, with rates generally expected to increase more in
2013.
- After a decade of steadily declining
rates, the D&O insurance market entered a state of transition
in the second quarter of 2012. Pricing at renewal in the fourth
quarter was typically flat to up 10% for publicly traded companies
and flat to up 15% for private companies. Many insurers appear
likely to continue seeking rate increases in 2013.
- Driven primarily by an increase in
frequency and severity of claims, commercial E&O and cyber
insurance rates began trending upward in 2012. Rates for both lines
were typically flat to up 5% in the fourth quarter and are
generally expected to continue to climb in 2013.
- Although conditions in the political
risk market remained generally stable, pricing increased in some
countries in the Middle East and North Africa at the end of 2012;
this trend appears likely to continue in 2013. Conditions in the US
trade credit insurance market are expected to continue to favor
insureds despite concern about the European sovereign debt crisis
and other global events.
About Marsh
Marsh, a global leader in insurance broking and risk management,
teams with its clients to define, design, and deliver innovative
industry-specific solutions that help them protect their future and
thrive. It has approximately 26,000 colleagues who collaborate to
provide advice and transactional capabilities to clients in over
100 countries. Marsh is a wholly owned subsidiary of Marsh &
McLennan Companies (NYSE: MMC), a global team of professional
services companies offering clients advice and solutions in the
areas of risk, strategy, and human capital. With over 53,000
employees worldwide and annual revenue exceeding $11 billion, Marsh
& McLennan Companies is also the parent company of Guy
Carpenter, a global leader in providing risk and reinsurance
intermediary services; Mercer, a global leader in talent, health,
retirement, and investment consulting; and Oliver Wyman, a global
leader in management consulting. Follow Marsh on Twitter
@Marsh_Inc.
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