NU Online News Service, Nov. 18, 12:25 p.m. EDT
One of the world's top insurance brokers said commercial insurance soft market conditions are expected to continue through to the end of the year.
New York-based Marsh, part of Marsh & McLennan Companies, yesterday released the results of its preliminary rate information on renewals for 2010, saying that current trends indicate a continuation of the soft market through this year and into the near future.
Marsh said that so far in the fourth quarter, clients renewing their programs have experienced average rate reductions across all major lines of business compared to the fourth quarter of 2009.
Marsh said preliminary fourth-quarter figures–the most current and relevant information available to risk managers–indicate that:
o Property rates declined an average of 4.4 percent.
o General liability rates declined an average of 6.9 percent.
o Workers' compensation rates declined an average of 3.7 percent.
o Directors and officers liability rates for public companies declined an average of 7 percent for primary programs and 10.3 percent for total programs.
o Employment practices liability (EPL) rates declined an average of 4.6 percent for primary programs and 4.7 percent for total programs.
"Marsh's preliminary data indicates that rates are continuing to trend downward, which is good news for our clients," said Dean Klisura, U.S. Risk Practices Leader, Marsh, in a statement. "Barring a market-changing event, we do not expect this trend to reverse in the near future."
The rate update is based on data from Marsh's Global Benchmarking Portal and reflects transactions brokered by Marsh through early November 2010, the firm said.
On Tuesday, an analyst note from Stifel Nicolaus stated that with the decline in insurance reserves by insurers and developments in unprofitable business, a change in the market cycle could develop by 2012.
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