Rate decreases 'still achievable' - Marsh

Global insurance rates continued to climb in most loss-affected geographies and classes of business in the fourth quarter of 2011, but rate decreases are still achievable in many lines of business, according to a Marsh report.

Despite record insured catastrophe losses of more than $100bn (£64bn) in 2011, Marsh’s Global Insurance Market Quarterly Briefing: Q4 2011 said that capacity in the global insurance market remains plentiful and across the board rate rises are not being seen.

It added that insurers, however, are responding to the record losses by seeking rate increases on accounts with significant losses and catastrophe exposures.

For example, Marsh said almost half of its US property insurance clients experienced rate increases at renewal during the second half of 2011, compared to 31% in the first half.

While most of those rate increases were applied to programmes with catastrophe exposure, accounts with little or no such exposure or losses were often able to secure rate decreases during the second half of the year.

“The global insurance market remains well-capitalised and generally competitive,” said Dean Klisura, US risk practices leader at Marsh.

“This year’s record catastrophic losses are resulting in price firming around catastrophe and loss-driven accounts, but there has been no overall change in market pricing.

“Market fundamentals remain generally strong.”