Discounted rates of up to 10 percent were available for crime, professional indemnity, and directors and officers insurance in the second quarter of 2006, according to a new survey by an insurance broker.
The majority of London Market underwriters polled in the Willis Index for Financial Institutions also suggested that terms for some markets in the next three months may become slightly less favorable to insureds.
In the Financial Institutions Index, Willis speculates that the reason why the market may become less favorable is that insurers could seek to increase rates anticipating the cost of substantial settlements for the large outstanding claims the market currently faces.
The index recognizes that in the event these claims do result in large payments from the market they will put pressure on rates. However, it finds no reason to believe that the affect will be felt in the next three months, which is simply too short a period for this to take effect.
Not all markets will be affected by these payments, and reinsurance (the biggest driver to rates) generally doesn't renew until year end.
"It is interesting to note that of the three main classes of business for financial institutions, professional indemnity is regarded by the market as less likely to attract such favorable terms," said a Willis spokesman.
However, highly competitive deals can still be found even for classes that might be thought to be less attractive, he added.
Underwriters are unanimous that retentions remain static, but trends in the amount of limits purchased seem a little more confused.
From Willis' observations, the majority of financial institutions seem content to keep limits constant, although some have taken advantage of a soft rating environment to purchase higher limits with minimal increase in premium spending.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
