For employee benefits programs, Willis predicts rate increases of five percent to six percent for organizations with self-insured plans, and 8.5 percent to 9.5 percent for insured plans. Employers remain focused on elements of the health care reform law that will go into effect in the next few years, particularly the Cadillac Tax, effective in 2018. Willis reports that the Cadillac Tax is expected to impact a significantly larger number of employers than originally anticipated due to the increasing cost of health care.

The most surprising market softening can be seen in aviation programs, where significant and high profile catastrophes continue to seize the world's attention. There is still ample capacity in the marketplace and excluding these exceptional losses, the industry's safety experience remains good. These factors have combined to reverse Willis' earlier predictions of sharply increased rates for this sector. Insurance buyers can expect renewals to range between flat and +10 percent for the remainder of 2015, Willis states.

Willis notes some exceptions to the broad downward trend and highlights several challenges in the marketplace, particularly for cyber insurance. With cyber breaches becoming alarmingly common and increasingly severe, the demand for stand-alone cyber policies is dramatically rising. Willis predicts increases of up to 10 percent for most buyers. However, organizations with point-of-sale (“POS”) exposures face 10 percent to 100 percent+ increases for primary premiums. Additional increases are likely in the excess layers of the program, due to paid claim activity. Underwriters are evaluating retailers and other organizations with POS systems with increased scrutiny. Adding to the upward pressure, some carriers in this space have increased their retentions, reduced their capacity or, in some cases, exited certain sectors.

Willis also expects rate increases on errors and omissions coverage for organizations with poor loss experience or difficult industry sectors currently at risk for large claims and litigation, such as technology firms. Some environmental insurance programs, particularly combined environmental plus casualty programs, are experiencing sharp increases as environmental claims against organizations continue to trend upward.

In the executive risks lines, buyers will find a mix of modest increases and decreases, Willis reports.

Matt Keeping, the chief broking officer at Willis North America, says, “Individual experiences will vary depending on industry, geography, and loss history, but overall we anticipate a marketplace that continues to offer opportunities for buyers. With weather and other catastrophic losses remaining below average for another year, and capital hungry for a somewhat predictable return, we see the forces of supply and demand working as expected.”

But challenges remain for organizations as risk profiles change, Mr. Keeping noted. “The threat of cyber-related losses seem to be a matter of not if, but when; the push for global markets is clashing with the realities of political upheaval and war in many places on the planet, making political risks increasingly unavoidable; and even if Nat Cat losses are down in the aggregate, there is the sense that a changing climate brings an increased potential for widespread catastrophe in heavily populated areas.

“Organizations will need to balance the pressure to keep costs down and the need to maximize resilience for the risk transfer spend – in other words, to make sure that the organization is sufficiently protected so that its greater goals can be met,” Mr. Keeping said.

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