But broker forecasts rate increases by 2010
UK companies are seeing their insurance premiums fall by up to 20%, according to Aon.
The broker claims that a combination of fewer claims, more proactive risk management and new insurers, such as QBE, has lead to increased competition and reduced rates.
It said that as result, brokers were negotiating up to 20% decreases in premium for covers including property and liability, despite escalation in risk due relating to the Corporate Manslaughter Act, record product recalls and a 15% increase in employment tribunals.
Mark Crawford, broking director at Aon, said: “The sub-prime market crisis has not impacted insurer balance sheets as deeply as anticipated due to their conservative investment behaviour. This has not led to an urgent need to increase rates... but corporate premiums are usually the last to turn.
He added: “Without significant insurer financial failure or major losses in the meantime, we’re forecasting rates to be on the rise by 2010. Premiums will turn and there are likely to be big swings so companies cannot afford to be complacent. They must focus on making their business robust to risks ranging from data loss and property damage to employee injury and directors’ liability. This will prove to insurers that they have strong risk management which will help to mitigate the swings in premium.”
