Property/casualty rates plateaued in the third quarter after rising in the first half of the year, a new survey from Chicago-based Aon finds.
Compiled quarterly report by Aon Analytics, the survey takes measure of property/casualty, and directors' and officers' insurance lines. For Q3, the report says property rates were generally flat and predicted stable rates through the remainder of 2009.
Indeed, the report concludes the rising rates of the first half of 2009 were aberrational, and due largely to tight capital markets restricting capacity.
“Many property carriers were concerned with their ability to raise capital in the event of a large industry loss event due to the very tight capital and credit markets, which led to a more conservative use of available capacity, particularly for natural catastrophic exposed risks,” the report states. “The result of this restriction of supply was increased rates—in some cases greater than 20%—for most high challenge risks through the first half of 2009.”
What’s more, Aon projects that the soft market will linger into 2010, stating that the market landscape going forward may bear little resemblance to the one enjoyed by insurers at the beginning of 2009. “The trend toward higher property rates has largely disappeared, and the future is much brighter for most buyers of property insurance.”
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