The market for liability coverage will remain competitivethrough 2007, according to a new study by Aon, but a hardening ofthe market may not be far on the horizon.

In a market report titled "Look Beyond the Obvious," Aonanalysts noted that the generally benign storm activity in 2006 hasled to a worldwide decrease in rates for liability coverage, withplentiful capacity and competition expected to drive rates furtherdown throughout 2007. These reductions, according to AON, areexpected to be up to 25 percent in the U.S., with even greaterdecreases in Europe and the Asia Pacific markets.

However, the report also pointed to a rising global"compensation culture" trend, and said that more than half of the53 countries examined saw an increase in both liability claims andseverity of awards.

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