North American commercial insurance buyers will probably see a modest improvement in market conditions over the remaining months of 2014. This is attributed to a softening in the property insurance line, as well as an easing of the upward pressure on several other lines of business, according to the results of the semi-annual Marketplace Realities report released by Willis Group Holdings.
The Group is a global insurance and reinsurance broker, and its report found that the marketplace is fluid with fairly strong competition across a variety of product lines. Matt Keeping, the chief placement officer of Willis North America points out that there are some “external factors” that are causing disruption and rate increases in certain areas, and that buyers should seek out options that will help them get the best possible prices while they obtain the coverage they need.
Property rates will probably drop by 10-15 per cent on average for non-catastrophe-exposed risks. Risks which are exposed to natural catastrophes, such as hurricanes, will fall by a rate of 7.5-12.5 per cent. This rate is slightly higher than predicted in the last Marketplace Realities forecast published in October.
The downward pressure is driven by ample capacity, lack of major catastrophe losses, and revised catastrophe modeling. The latter is generating lower loss estimates for windstorm risk.
Commercial casualty coverage increases are likely to be in the single-digit range. There will also be some decreases on umbrella and excess rates the report forecasts.
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