Global insurance rates continued to firm in Q4 2012, despite the insured losses attributable to Superstorm Sandy. According to the “Marsh Risk Management Global Insurance Index,” a weighted average of rate change activity for major lines of insurance over the previous four quarters, insurance rates rose to 101.2 from 100.9 in the third quarter. The index was based at 100.0 in the second quarter of 2012.
“While Superstorm Sandy caused some insurers to suffer significant losses, we do not expect it to be a market-changing event. Insurers remain well capitalized with most of them unlikely to reduce their capacity in 2013,” said Dean Klisura, Marsh’s U.S. Risk Practices and Specialties leader. “However, some insurers are increasing their push for rate increases. The proportion of U.S. insureds seeing rate reductions on renewal fell in most lines of business this quarter. U.S. insureds will find it increasingly difficult to secure rate decreases for property insurance in early 2013. This is especially true for those with losses from Sandy. Flat or declining premium rates at renewal typically are likely to be reserved for insureds with favorable loss histories and low catastrophe exposures.”
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