NU Online News Service, Dec. 23, 11:19 a.m.EST

As the year comes to a close, Marsh issued a report sayingcurrent insurance rates are on a two-speed track, with lossaffected accounts experiencing steep increases while good risks canstill benefit from decreases on renewal.

In its “Global Insurance Market Quarterly Briefing, FourthQuarter 2011” report, published yesterday, insurance brokerMarsh says in most “loss-affected geographies and classes ofbusiness” rates were on the rise during the fourth quarter.

However, despite record insured-catastrophe losses in excess of$100 billion this year, capacity remains abundant and rates did notrise across the board.

In the face of record losses, insurers are seeking rateincreases on accounts with significant losses and catastropheexposures, says Marsh.

Marsh says almost half of itsU.S.property-insurance clientsexperienced rate increases at renewal during the second half of2011, compared to 31 percent in the first half.

While most of those rate increases were applied to programs withcatastrophe exposure, accounts with little or no such exposure orlosses were often able to secure rate decreases during the secondhalf of the year, says the broker.

“The global-insurance market remains well-capitalized andgenerally competitive,” says Dean Klisura,U.S.risk practicesleader, Marsh in a statement. “This year's record catastrophiclosses are resulting in price firming around catastrophe andloss-driven accounts, but there has been no overall change inmarket pricing. Market fundamentals remain generally strong.”

According to Marsh's report:

• Countries affected by major catastrophe events during the yearsaw the largest property catastrophe rate increases in the quarter.InJapan, programs with earthquake risks typically renewed withincreases of up to 50 percent. InThailand, where insured lossesfrom flooding aroundBangkokare estimated to be greater than $10billion, programs are renewing with increases of up to 30percent.
• Globally, employee-benefit costs increased significantly duringthe quarter as a result of higher medical costs. InIndia, forexample, employers experienced 20 percent rate increases in thequarter.
• Rates for directors and officers liability insurance in largeemerging markets, such asChinaandIndiacontinue to rise, while ratesin all other major markets remain stable or are declining.
• In theUnited States, D&O rates continue to decline forthose with a favorable risk profile, but the rate of decline “isdecelerating” on some accounts.