Insurance buyers will see a mix of rising and falling commercial property/casualty rates in 2013, according to the "2013 Marketplace Realities” report from Willis Group Holdings, the global insurance broker. The report is intended as a guide for North American insurance buyers preparing for November, December and January insurance program renewals.

“The key to success in a micro world is specialization, customization and individualization,” said Joe Plumeri, Willis Group Chairman and CEO, adding that due to the lack of strong macro trends, individual insurance buyers will be more impacted by specific industry, sub-industry and geographic micro trends. “Buyers are under the same pressure to protect themselves, their capital and assets by spending as little of that capital as they can,” he said. “There are still big savings to be had, even in a market that is firming after years of soft rates. We just have to work a little harder and look a little deeper to find them.”

The market continues to defy the standard hard/soft market cycle, Willis notes, as moderate rate increases in casualty, executive risks and several specialty lines likely will be offset by declining rates for non-catastrophe exposed property programs and other risk areas. For the property insurance market, 2012 has been a year of recovery after record-setting losses in 2011, however, a hard market has not materialized due to several factors.

“Abundant capacity, low underwriting losses and the lingering weak economy are creating a flat marketplace. Insurance buyers with catastrophe (CAT)-exposed property risks can expect flat renewals, while buyers with non-CAT exposed risks will experience decreases in the 5-10 percent range,” the report said. “Casualty lines are experiencing some upward movement and General Liability buyers are facing rate increases in the 3-7.5 percent range, with Excess rate increases running a higher on some programs.”

Willis’ Key Price Predictions

Prices are expected to continue firming into 2013 for some specialty risks, including primary directors’ and officers’ liability, employment practices liability and certain construction segments, according to the report.

In addition, employers are focused on elements of the health care reform law; health insurance costs continue to rise as insurers pass down compliance costs and organizations attempt to stem rising costs. Rate increase 2013 can be expected to approach 10 percent, the report said.

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