Rates in the global insurance market generally firmed in the second quarter of 2012. According to the Marsh Risk Management Global Insurance Index, the global insurance market has shown a clear trend of firming since the third quarter of 2011.
The multiyear slide in liability insurance rates showed signs of moderating as general liability and professional liability insurance rates were typically stable at renewal in most major geographies.
Property insurance rates rose in the second quarter of 2012, driven by unexpected adverse loss developments from the major catastrophes of 2011, increased focus by insurers on the data provided by insureds, a rise in attritional losses, and changes to insurers’ calculations of their risk-adjusted cost of capital.
Property insurance rates for insureds with moderate to heavy catastrophe exposures climbed significantly in loss- affected regions; insureds without such exposures generally saw rates stabilise.
Marsh also found that some insurers are responding to increasing concerns about cyber risks with product innovations, such as new protection for cloud computing.
Overall, insurers in the second quarter increased their levels of scrutiny of new and renewing business, leading to longer underwriting times. They placed greater emphasis on the quality of data provided, including details around large losses and overall loss trends in programmes.