JLT’s Drummond Brady: ‘no real evidence’ of UK rate rises

There is no real hardening of UK insurance prices despite talk of rate rises, according to Jardine Lloyd Thompson’s (JLT) international risk and insurance chairman Mark Drummond Brady.

Speaking to Insurance Times following the release of JLT’s 2012 results this morning, Drummond Brady said: “There is a lot of talk about hardening markets, but our experience is that there is no real evidence that it is happening.”

He described the market as “patchy” with examples of rate increases in some areas. These include the lower end of the real estate insurance market, where Drummond Brady says loss experience “has been pretty poor” and lines of business that have actuarially-led pricing, such as UK motor.

However, he added: “This is more a statement of the low interest rate environment than it is around anything else to do with market-driven rate movements.”

Actuarially-led lines such as employers’ liability are increasing outside the UK, said Drummond Brady, “but in the UK that is definitely not the case. The employers’ liability market remains very soft.”

Thistle prospects

JLT posted solid 2012 results, beating its larger rivals Marsh, Aon and Willis with 7% organic revenue growth. The broking group also boosted profits by 19%.

However, one area that did not keep pace with group performance was JLT’s UK managing general agency (MGA) Thistle. Its revenues fell 4% and its profits dropped 20%.

JLT strategy director James Twining acknowledged that Thistle was the most exposed of JLT’s businesses to the lack of consumer and small business confidence in the UK. He said: “Those factors have weighed against the business.”

However, Twining added that JLT has “big ambitions” for Thistle.

He said: “We do believe in the underlying opportunity, and in Paul Matthews we have a new leader who has been in place since July. He is really taking forward the strategy of that business and has brought a lot to the table. We are really excited about the prospects for that business.”