Despite the mounting costs to the insurance industry caused by Superstorm Sandy, global insurance rates have continued to firm in Q4 of 2012 according to Marsh’s Global Insurance Market Quarterly Briefing.
“The Marsh Risk Management Global Insurance Index, a composite or weighted average of rate change activity over the preceding four quarters in major lines of insurance business, rose slightly to 101.2 from 100.9 in the third quarter. The index was based at 100.0 in the second quarter of 2012,” said a statement from the firm.
Figures also showed that financial institutions in the US, Europe and Australia continued to see rate increases in their liability insurance programmes during Q4, reflecting insurers’ concern about the global economic situation and increased regulatory scrutiny.
The average rate change at renewal was a 1.2 percent increase in Q4, compared to the 1.4 percent seen in Q3. Rates for financial and professional lines continued to rise, with the average renewal showing a 2.2 percent increase year-on-year.
Marsh’s US risk practices and specialties leader, Dean Klisura, said: “While Superstorm Sandy caused some insurers to suffer significant losses, we do not expect it to be a market-changing event.”
“Insurers remain well-capitalised with most of them unlikely to reduce their capacity in 2013.”
