Willis Says International D&O Market Favors Buyers
NU Online News Service, Feb. 7, 3 :55 p.m. EST?The international directors and officers liability insurance market will be a favorable place for buyers in the coming months according to insurers surveyed by Willis Group Holdings.
Willis said its poll of the international D&O market, which excludes U.S. insurers, found carriers expecting continued downward trends in rates in the next three months. There is also a growing feeling among the carriers that coverage terms could increase, along with limits for segments of the policyholders.
The Willis Index report on D&O, surveyed insurers outside of the U.S., including Lloyd's in London and those that are Bermuda based, on their views of the market in the preceding three months of Jan. 2005, and asked what they see in the future.
The report said 95 percent of the market was invited to participate in the report, but did not release the actual number of carriers who responded.
According to the report, Willis sees D&O primary and excess premiums leveling off at around 10 percent decrease in the coming months. The vast majority of insurers said they foresee continued premium rate declines in the coming months.
Policyholders, Willis went on to say, should be able to improve on the terms of their coverage as a significant percentage of carriers, 38 percent, believe they would increase terms in the next three months, while an equal percentage feel terms would remain unchanged.
On the question of limits, 46 percent of insurers think limits could increase by up to 10 percent, while the same amount do not believe limits could change.
Willis emphasized that the enhancements of coverage depends on the company risk, both current and past.
Where premium rates "are competitive," Willis went on to say, it will seek to enhance customers' coverage through terms and reducing deductibles.
In a section dealing with the issue of limits, Willis recommends that they be reviewed every two to three years and right now could be an opportune time to make those increases.
The report also reviews outside directorship liability, what is covered and when it is necessary.
Copies of the report from the London-headquartered insurance broker are available at www.willis.com and clicking on the "Publications" menu.
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