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On January 27, 2010, Marsh held a New Reality of Risk panel discussion, "Global Insurance Markets in 2010 — Responding to the Challenge." The Webcast covered a wide range of risk management issues and trends affecting insurance markets this year.
Intense competition among insurers, increased capacity, and fewer insured catastrophe losses all played key roles in keeping insurance markets generally stable in 2009—and are poised to do so again in 2010.
In early 2010, a number of key questions predominate discussions about insurance pricing and capacity and risk management trends:
- Will the economy continue to recover—and how will insurance capacity, competition, and pricing be affected?
- How will catastrophe risks play out?
- What new risks will appear, and where?
- And through it all, how can clients best approach the insurance markets?
A panel of risk and insurance specialists analyzed global insurance market trends in a recent edition of Marsh’s Webcast series The New Reality of Risk.
"As we enter 2010, the property insurance marketplace generally has stabilized, with few signs of the hardening predicted by many just a year ago. Capacity is likely to remain stable and, generally, more clients are likely to see rate decreases," said Duncan Ellis, leader of Marsh's Global Property Practice.
Ellis added that much of the focus in property insurance markets has been and will continue to be on catastrophe (CAT) exposures. He noted that hurricane experts are predicting an above-average Atlantic hurricane season following a below-average year in 2009.
"One thing we are seeing, especially with significantly CAT-exposed clients, is that many elected to change the terms and conditions of their property programs to offset potential increases. Marsh's benchmarking data shows that many CAT-exposed clients employed one or more of the following tactics to minimize rate increases:
- reduced the policy limits of catastrophe coverage purchased;
- increased deductibles; and/or
- reduced sublimits."
Collateral concerns continue to be one of the critical areas in casualty insurance programs, said Tony Tam, a managing director with Marsh's Casualty Practice. Tam and others also outlined global insurance market issues. Casualty insurance issues include compliance with admitted insurance regulations, with insurers paying more attention to premium allocations to ensure adequacy of premiums with local regulators.
Regulations are a continuing concern in most areas, panelists agreed. In environmental risks, for example, a number of countries have introduced significant legislative and regulatory changes aimed at increasing the enforcement of environmental laws and holding businesses accountable for breaking them, said Chris Smy, leader of Marsh's Global Environmental Practice.
Other areas covered in the discussion included the performance of the property/casualty industry, global reinsurance, financial and professional coverages, earthquake modeling, and more.
Listen to a replay of the Webcast.
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