Healthy capital and overly competing with AIG to blame
Willis’s latest spring update – a different kind of cat - has said expected price rises and the hard market have failed to materialise.
It gives three reasons:
- 2006 and 2007 produced record surpluses for insurance companies and., despite a poor 2008, the industry remains well capitalised.
- There are many new entrants as insurance is seen as a safe place for investors to put their money compared with the rest of the financial services sector.
- Companies are cutting or holding premiums because they are overly keen to complete for AIG’s business.
It said: “Not only is AIG under intense pressure to keep business, but competitors seem overly focused, sometimes intensely so, on the possibility of wresting business away from the market leader.
