BUYERS SEE TOUGHER PROPERTY INSURANCE PRICING
Lockton Market Update reports insurers "have put the brakes on price reductions"
(Kansas City, Mo., USA and London, UK), 17 November 2011 - Large catastrophe losses and the prospect of poor investment returns are creating more difficult property insurance market conditions for commercial insurance buyers, according to the latest Lockton Market Update.
The new report provides a snapshot of market conditions in key commercial insurance markets including commercial property and property catastrophe markets in the U.S. and globally.
Insurers "have put the brakes on price reductions in the property catastrophe market and are raising rates as they reduce capacity," says Jim Rubel, Director of Property and Energy Insurance for Lockton in New York in his report. "For catastrophic risks, market conditions are now difficult, meaning that buyers could face dramatic price increases. Even so, this is not yet a true hard market, where capacity is not available at any price. It may not take much more, however, to trigger a hard market."
Rubel says that the transition away from the soft market conditions of the last several years continues to develop and is tied to a sharp increase in catastrophe losses.
Says Simon Scholfield of Lockton's London-based property insurance team, "There will, of course, be regional exceptions: Asia, for example, where the market can be expected to remain highly competitive, and the U.K., where the absence of any direct catastrophe exposure is a moderating factor."
Schofield adds in his commentary that other markets are seeing more dramatic price increases. "Equally, certain markets such as food manufacturers and habitational accounts have seen rates increase more significantly due to localised loss experience."
The Lockton Market Update is available free. The newest update includes reports on more than a dozen insurance and employee benefits markets globally.
More than 4,100 professionals at Lockton provide more than 15,000 clients around the world with insurance, benefits, and risk management services, offering an uncommon level of client service. From its founding in 1966 in Kansas City, Missouri, Lockton has grown to become the largest privately held insurance broker in the world and 9th largest overall. Independent researcher Greenwich Associates awarded Lockton its 2011 Service Excellence Award for risk management for large companies. For three consecutive years, Business Insurance has recognized Lockton as a "Best Place to Work in Insurance."