Insurance buyers will see a “mixed market” in 2013, Willis predicts

Insurance buyers will face a “complex marketplace” in 2013, with property and casualty rates mainly flat or decreasing with a few exceptions, predicts a new report from global insurance broker Willis Group Holdings.

This year has been one of recovery for the P&C industry, following major losses in 2011, says Marketplace Realities 2013, published as a guide for North American insurance buyers.

The economy, however, particularly low interest rates, continues to be the major barrier to growth, the report notes.  While casualty, executive risks and several specialty lines will see small rate increases, buyers with non-catastrophe exposed risks will see decreases of between 5% and 10%, Willis says.

“Abundant capacity, low underwriting losses and the lingering weak economy are creating a flat marketplace,” notes a statement from Willis. During the industry’s major annual conference in Monte Carlo in September, reinsurance executives also said they expect flat rates in 2013.

Key price predictions for 2013 from the report include:

• Property
  • Non-CAT Risks: -5% to -10%
  • CAT-Exposed Risks: Flat
• Casualty
  • General Liability: +3% to +7.5%
  • Umbrella: Flat to +7.5%
  • Excess: +2% to +15%
  • Workers’ Comp: +2.5% to +7.5%; up to +20% in CA
  • Auto: +2% to +5%
• Executive Risks
  • Directors & Officers: Flat to +10%
  • Errors & Omissions: +5% or more with good loss experience; +10 to +25% with poor loss experience
  • Employment Practices Liability: Flat to +10%
  • Fiduciary: Flat to +15%
  • Cyber: Flat to -3%; more competitive for first-time buyers
  • Benefits: +8% to +10%

The full report is available on Willis’ website.