However, there is positive news for insurers: claims are low and many buyers are expanding their businesses with a corresponding growth in their insurance needs, while inward foreign investment is creating further demand.

“While we continue to see a reduction in rates, we also expect to see growth in the overall size of the premium pot,” said Oliver Schofield, leader of Aon's global property practice.

“Economic prospects for the region in the medium term remain bright. The non-life insurance sector is forecast to grow by 2 percent in 2007, or just under 9 percent if you exclude the Japanese market. Despite declining rates, Asia remains a very attractive market,” added Mr. Schofield.

Simon Thompson, leader of Aon's global liability practice, said, “Buyers of general liability continue to enjoy rate reductions, or stability at worst, in almost all cases.”

According to Mr. Thompson, “Perception of emerging liability risks is rising in the region, but awareness still falls behind their European peers. This will be a factor for both buyers and insurers in the near future as Asian corporations continue to expand their operations globally.

“Asian insurers are, however, enjoying healthy growth in their directors and officers premium volume,” he continued. “Limits are being purchased for the first time by some buyers and increased by others as corporate governance measures bite and foreign capital raising elevates risk exposures.”

The report said for property coverage almost 50 percent of buyers report reductions of 10 percent or more in the last 12 months, and more than half are expecting further reductions going forward.

Underwriters, the study found, do not anticipate any rate rises next year, with 75 percent expecting further reductions. Four out of five underwriters say they are willing to offer policy enhancements in exchange for no reduction in rates, while around 50 percent of buyers say they would be interested in such a deal.

Risk information is improving, but insurers believe buyers could do better. Buyers are considering different program structures, including captives.

For general liability coverage, the study found 50 percent of buyers report lower premiums in the last renewals, with one in five seeing reductions in excess of 10 percent.

Around 50 percent of buyers said they are hoping for further reductions, but 40 percent expect rates to remain stable. Underwriters are divided equally between those expecting further reductions and those hoping for stability.

Buyers appear to have a limited knowledge of emerging risks and are considering greater use of captives, the report said.

Eight percent of buyers of directors and officers liability insurance reported falling rates, with over half reduced by 10 percent or more. Insurers reported growth in the market over the last 12 months. Buyers' awareness of D&O is increasing, but a minority still have no cover, according to Aon's analysis.