UK Underwriters See Hardening Market In 2009

The first quarter of 2009 will see the cost of auto insurance premiums rise in the UK, according to a large majority of underwriters polled in Aon's latest Market Pulse.

The survey was conducted among insurers that underwrote ?23.5 billion ($33.2 billion U.S. dollars at current exchange rate) worth of premiums for UK companies in 2008.

Aon said 92 percent of respondents believed premiums would rise in the quarter, and that could be a “strong indicator” of how other types of insurance will trend, Aon said.

Aon added that 74 percent of underwriters believe property rates will rise in the next three months, and 69 percent expect the same for liability premiums.

Steve Redgwell, head broking director for Aon's mid- to large-size UK companies, said, “We are hearing very strong messages from insurers about rates rising, but these have not yet manifested themselves into actual increases.”

Some comments from underwriters who were polled indicated that they expected an overall hardening of the market in 2009. One respondent said, “This will present challenges. Companies will be looking to minimize expenditure due to their own financial pressures; at the same time, insurers will be forced to increase rates.”

Another underwriter predicted, “Well-managed risks will remain competitively priced, but there will be premium increases of 10-plus percent for poor and unmanaged risks.”