The year 2011 was challenging for the property insurance market. Insured global catastrophe losses totaling $108 billion driving the rise of global property insurance rates in the first quarter of 2012, according to two new reports.
Marsh’s “Global Insurance Market Quarterly Briefing: Q1 2012” found that last year was the second most costly for insured losses and included the highest-ever level of insured earthquake losses.
Meanwhile, a study by Willis Group Holdings reported that among primary umbrella casualty lines more than 75 percent of insured clients are seeing modest rate increases on renewal, driven by gradual increases in revenues and rating exposures.
“So as rates may rise here, and there and you may need to do something you have not done in several years—present unpleasant news at budget time—keep in mind not just the cost but the value of what you’re buying,” Willis Chairman and CEO Joe Plumeri noted in a press release.
Entitled “2012 Marketplace Realities,” the Willis’ annual publication lists key price predictions of 7.5 to 12.5 percent in catastrophe-exposed risk areas compared to flat pricing for non-catastrophe risk areas.
“You’ve been paying less—in many cases much less—for things that are hard to put a price on: protection, resilience and the freedom from risk that allows you to take chances and achieve what you and your stakeholders want most to achieve,” Plumeri stated.
Marsh’s report indicates that rates for catastrophe-exposed risks in the United States increased between 10 percent and 20 percent while property accounts with no catastrophe exposure rose by up to 10 percent.
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