The soft market continues in Q2, says Willis

Rates continued to decrease in the second quarter of 2007 across all financial, executive and professional lines of insurance, according to a survey of London market insurers by Willis Group Holdings.

According to the study, the downward pressure on rates for financial institutions insurance in Q1 2007 has continued, and looks set to run until at least the end of the year.

The survey found that insureds are still purchasing increased limits and maintaining their levels of self insurance. It also revealed a continued willingness from most markets to review and improve wordings when driven.

Willis said: “The last quarter saw a significant and sudden drop in reported rates for directors and officers liability insurance, with large reductions of up to 20% being seen again in underwriters’ renewal books.”

“Accountants and auditors professional indemnity rates have been consistently lower (and have decreased faster) than the PI market as a whole. This has led many reinsurers to move their interest and focus to other more profitable and stable lines. Consequently there has been an effect on the PI rates. “

According to Willis, many underwriters see their rates starting to flatten out, and even starting to increase again in the run-up to 2008. However, in the immediate term it is still a “buyer’s market”, especially for small-to-medium sized firms.