NU Online News Service, April 12, 2:35 p.m.EST

With rates rising in many commercial-insurance lines—althoughnot uniformly across all lines—risk managers may have to deliverunpleasant news at budget time, but they should stress the value ofthe products, rather than just the cost, Willis' chief executivesays.

In an introduction to Willis' latest “Market Realities” report,Chairman and Chief Executive Officer Joseph Plumeri writes, “Therole of the insurer is to make sure they survive the storms so thatwhen their clients need them, they will be here. What insurersoffer…is their own resilience.”

Plumeri adds, “We suggest that risk managers and others incharge of risk mitigation and risk transfer may benefit by taking asimilar view of your own work. That, ultimately, is your job aswell: ensuring resilience.”

He says that, as rates rise, risk managers should keep in mindthat they have been paying less in recent years for protection,resilience “and the freedom from risk that allows you to takechances and achieve what you and your stakeholders most want toachieve.”

As for the insurance market, Plumeri says in his introductionthat insurers are showing little inclination toward uniform firmingseen in previous hard-market patterns. As such, he notes that whilethose who do not learn from history may be condemned to repeat it,“those who expect the same patterns to continue forever may beseverely disappointed.”

Regarding specific lines, Willis says that in the 2011 fourthquarter, catastrophe-exposed property rates rose by an average ofbetween 5 percent and 10 percent.

A recent study of 2012 first-quarter property rates conducted bybroker Marsh says global property rates, including in the U.S.,were on the rise for both cat-exposed and non-cat-exposedproperties.

Willis' study, though, predicts flat rates for non-cat-exposedproperty risks in the first quarter, and increases of between 7.5percent and 12.5 percent for cat-exposed risks.

Willis says that although property rates are rising in 2012,“abundant capacity and the continuing weak economy have temperedthe upward pressure.”

For the casualty market, Willis says more than 75 percent ofinsureds are seeing modest rate increases on renewal. Additionally,Willis says underwriters are showing less flexibility on coverage.“Gradual increases in revenues and rating exposures are puttingupward pressure on premiums,” the broker says.

Willis says it expects rates to range from flat to increases of7.5 percent.

In workers' compensation, Willis says about 90 percent ofinsureds are seeing rate increases on renewal, particularly inCalifornia and the Northeast. But Willis notes that “healthy marketcompetition” is still creating positive premium results for manybuyers. The brokerage expects rates to range from up by 2.5 percentto up by 7.5 percent.

In the commercial auto space, Willis says about 80 percent ofinsureds are experiencing rate increases, driven by severe lossesin auto liability. “Accurate reporting of fleet by type of vehicle,good loss experience and ongoing loss control are critical tofavorable renewal efforts,” Willis says. Rates are expected torange from flat to up by 10 percent.

For directors and officers coverage, Willis says price decreasesare becoming less common for public-company coverages. Willisexpects rates to range from down 5 percent to up 5 percent goingforward. Public companies are expected to see rates range from down5 percent to up 10 percent, while private companies can expectrates to range from flat to up by 5 percent.