CIAB Attendees More At Ease with Market Direction in 2012

But "business as usual" still involves some degree of a changing landscape for the insurance industry.

Pruett says larger, tougher accounts that were taken by retail-insurance markets are beginning to gravitate back to the wholesale side of the business.

Insurers, he and others note, are still faced with the challenge of poor investment returns.

"The industry is in need of rate and many companies are trying to drive rate, including Zurich" says Craig Fundum, president of commercial markets for the insurer Zurich.

He says property prices were firming in the first half of the year, but rates are moderating in the second-half. Much of the moderation has to do with the lack of major catastrophe during the year, especially a very mild hurricane season, in terms of losses.

However, he says, in this environment of low investment yields, there needs to be "disciplined underwriting and pricing" and increased efficiency in operations in order for companies to make a profit.

Timothy A. DeSett, executive vice president, risk practices for insurance broker Lockton, says that while rate increases are occurring at a very modest rate of up to 5 percent, risks with losses can expect to see sharper increases.

Clients are taking measures to protect themselves from expected increases. Some, says DeSett, are taking large deductibles to reduce the increase to flat in some cases.

DeSett says carriers are keeping clients informed with respect to rate movement to avoid unpleasant surprises. "Clients are upset when there is a lack of forewarning," he says. "The market has done a good job explaining itself so there are no surprises."

Eric Andersen, chief executive officer, Aon Risk Solutions Americas, a division of London-based insurance broker Aon, says that after a number of soft market years, the markets are now close to flat. The issue for carriers, he says, "is an income-statement problem. They have to underwrite to a profit. They were successful for 12 months in raising rates."

But with adequate capacity translating to competition for risks, Andersen adds, "I don't know how it does not go back to a soft market at some point."

Alastair Swift, CEO, global placement, for the insurance broker Willis, says while there were "reasonable increases on the property side," after the major catastrophes in 2011, the industry "still did not see a lot of upward lift."

Clients, he says, do not want to pay more money for their insurance as they still seek to control overall spending and are quick to shop. He says that if an insurance program "comes in with rate increases, the customer wants [the risk to go out to] the market to look at it." That is especially true "if the increases seem excessive."

He believes that even if there "is a major catastrophic event in the next couple of months, we can expect to see a spike in the market, but not a hard market."

The reason, he says, comes down to capacity and an abundance of capital that insurers can deploy quickly.

Bronek Masojada, chief executive officer for the insurer Hiscox, gave a more cautionary assessment, warning that insurers have seen their surplus drop substantially, and this reality can't be ignored forever.

"Something has got to give and it will probably happen more on the liability side," observes Masojada. "Economics work eventually, even in insurance."

Adds Ben Walter, CEO of Hiscox USA, "Something has to give at some point; it is not a question of if, but when."