Commercial-insurance buyers for international construction and some property and casualty coverages are seeing rate reductions of up to 30% through the first half of 2014, thanks to overcapacity in the marketplace.
A Willis Group Holdings report, “Willis Q3 2014 Construction, Property & Casualty Market Review,” says benign loss activity combined with a softening global reinsurance market that is having a trickle-down effect in the primary market are pressuring rates.
For international construction, Willis says a reduction in construction projects in many parts of the world has intensified competition. Additionally, insurers are not withdrawing from the market, leaving capacity at an all-time high, creating an environment for more favorable rates for buyers.
Willis also says the international P&C insurance market “continues to witness an influx of capital. Provided that detailed risk information is available, carriers are prepared to offer insurance buyers improved coverage, particularly improved contingent business interruption extensions.”
For property, Willis says premiums are continuing to decrease by between 10% and 15% on claims-free business. Buyers who “clearly demonstrate robust risk-management practices and detailed risk information” can see larger reductions, Willis adds.
James Nicholson, head of Broking and Industry Practice Groups for Construction, Property and Casualty at Willis, says in a statement, “Our view is that soft-market conditions are likely to continue without necessarily threatening the profitability and solvency of carriers, provided that they actively manage their portfolios. For their part, corporate-insurance buyers can achieve substantially better than average pricing through the provision of good underwriting data, the use of analytics to drive pricing and through strong relationships with carriers. The outlook therefore remains very favorable for corporate buyers and more particularly for the well-informed.”
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.
