Global Insurance Market Quarterly Briefing – August 2013
Insurance rates in Latin America, Asia-Pacific, the UK, and Continental Europe declined modestly in the second quarter of 2013; rates in the US rose moderately.
Merger objection litigation and continued enforcement activities by regulators — translating into investigations involving both corporations and their executives — contributed to rate pressures for directors and officers liability insurance.
Insurance rates in regions such as Latin America, Asia-Pacific, the UK, and Continental Europe declined modestly in the second quarter of 2013, while rates in the US rose moderately. The combined effect was a decline in the Marsh Risk Management Global Insurance Index for the first time since its inception six quarters ago. The index represents a composite, or weighted, average of global rate change activity over the preceding four quarters.
According to the report:
- The US was the only region to show an increase in the composite rate on renewal, with a rise of 1.6% when viewed across all lines of business.
- Casualty insurance rates generally fell between 1% and 5% in the UK, Europe, and Latin America, while increasing in the US.
- In financial and professional lines, renewals in the UK and Continental Europe typically saw slight decreases, while renewals in the US were typically up between 2% and 3%.
- Increased capacity and competition among insurers and low losses from catastrophes generally kept property premiums from rising in the second quarter.
- Merger objection claims and litigation in the US remained an issue for D&O insurers as nearly every M&A deal these days triggers at least one lawsuit.
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