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A rapidly hardening property insurance market in the first half of the year slowed down a little bit in the third quarter, according to insurance broker Aon (AOC). Property rates increased 4% to 5% on average, with some corners of the market surging more than 20%, during the first half 2009. In the third quarter, rates were up an average of only 0.2%.
Low levels of insured loss have contributed to strong profits for property carriers, and the industry's surplus is up $463 billion -- all of which means there is little reason to pump up insurance rates. Rates should remain stable for the rest of the year.
According to Aon's quarterly market report, "The limited hard property market of 2009 is largely behind most insurance buyers for the foreseeable future."
A quarter of property insurance buyers increased their limits in the third quarter of this year, up from only 11% in the second quarter. This suggests a more competitive market, Aon reported.
In the directors and officers segment, the post-Lehman hardening market for financial institutions is showing signs of relief. This sector's average D&O insurance rates gained only 3.2% year-over-year in the third quarter, which is the first quarter the line of business's rates were up only single digits. For the nonfinancial side of the D&O market, rate decreases averaged 4.9%.
The report said the "marketplace for all other sectors continues to be extremely competitive, with rates trending down, ample capacity, and the broadest terms and conditions seen in years."
Casualty insurance rates softened, as well, with rates either flat or down single digits. Workers compensation and general liability insurance rates fell 2% on average -- compared to 8% rate decreases year-over-year in the third quarter of 2008.
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Reader Comments (Page 1 of 1)
12-06-2009 @ 8:51AM
bdarwin111 said...
USAA didn't get the word. They went up over 16% on my home owners policy this year. I don't even live on the coast. They forced me for the fist time in over 20 year to go out and price insurance. I am now switching to Amica and will save 900 per year on my car and home policys.