Rate increases for nat cat exposed firms in 2012, Insurance rates for businesses with exposure to natural catastrophe and supply chain risks are expected to keep increasing in 2012 across Europe, the Middle East and Africa, according to a report published today by Marsh.
Substantial catastrophe losses and reduced investment returns prompted many insurers to seek rate increases in 2011, said the broker in its annual EMEA market report.
Marsh expects rate reductions for property risks to become less frequent in 2012 as underwriters continue to push for rises or restrict limits on accounts with significant losses or catastrophe exposures.
"However, companies with favourable claims records, robust data and little catastrophe exposure may be able to secure reductions at renewal in both property and liability classes of business, " it said.
Marsh also notes that the motor insurance market will remain challenging in many European countries in 2012 due to insurers' continued concerns over high loss ratios. In the Middle East, where competition had led to decreases of up to 30%, motor rates are expected to stabilise.
In addition, trends in financial and professional lines of business are inconsistent across EMEA, according to the report, with rates continuing to decline for middle market business as underwriters perceive it as a ‘better risk'. Larger financial institutions, however, have been unable to achieve further rate reductions, amid insurer concerns about the sector's exposure to the Eurozone crisis and ongoing claims.
"Insurers are scrutinising renewals more closely than at any time in the last decade, " commented Martin South, chief executive officer of Marsh Europe. "While rates are generally expected to remain stable across Europe for the first half of 2012, the future implementation of Solvency II and other market factors may increase pressure from insurers to increase rates. "
Beyond Europe, the 'Arab Spring' has had a profound impact on benefits decision-makers throughout the Middle East and Northern Africa and political violence is now ranked among the most serious employee risks, according to Marsh.
In the Middle East, many countries experienced medical inflation of 10% to 15% last year. In Europe, medical plan costs rose as national health systems were cut, claims inflation continued, and insurers sought higher margins.
Substantial catastrophe losses and reduced investment returns prompted many insurers to seek rate increases in 2011, said the broker in its annual EMEA market report.
Marsh expects rate reductions for property risks to become less frequent in 2012 as underwriters continue to push for rises or restrict limits on accounts with significant losses or catastrophe exposures.
"However, companies with favourable claims records, robust data and little catastrophe exposure may be able to secure reductions at renewal in both property and liability classes of business, " it said.
Marsh also notes that the motor insurance market will remain challenging in many European countries in 2012 due to insurers' continued concerns over high loss ratios. In the Middle East, where competition had led to decreases of up to 30%, motor rates are expected to stabilise.
In addition, trends in financial and professional lines of business are inconsistent across EMEA, according to the report, with rates continuing to decline for middle market business as underwriters perceive it as a ‘better risk'. Larger financial institutions, however, have been unable to achieve further rate reductions, amid insurer concerns about the sector's exposure to the Eurozone crisis and ongoing claims.
"Insurers are scrutinising renewals more closely than at any time in the last decade, " commented Martin South, chief executive officer of Marsh Europe. "While rates are generally expected to remain stable across Europe for the first half of 2012, the future implementation of Solvency II and other market factors may increase pressure from insurers to increase rates. "
Beyond Europe, the 'Arab Spring' has had a profound impact on benefits decision-makers throughout the Middle East and Northern Africa and political violence is now ranked among the most serious employee risks, according to Marsh.
In the Middle East, many countries experienced medical inflation of 10% to 15% last year. In Europe, medical plan costs rose as national health systems were cut, claims inflation continued, and insurers sought higher margins.
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