Rates for catastrophe-exposed property business and more generally for international and US business have started to increase, according to Lloyd’s insurer Hardy.
The company said in its Q1 interim management statement that the increases in some cases were material, and added that terms and conditions are also tightening. “We expect our current average property treaty rate rise of 2.1% to improve as the year develops,” the statement read.
Hardy attributed the changes to the prolonged period of exceptional catastrophe activity, the impact of the recent RMS model changes and the resulting increased demand for cover.
Including the 2.1% increase in property treaty rates, Hardy saw an average price rise of 1.5% across its book in Q1 2011, which it described as “broadly neutral”.
While prices in most lines increased, specialty lines rates dropped 2.2%. Hardy said market conditions for marine and aviation risks and also for specialty lines have been challenging, although it added rate reductions are no longer being sought and that rates have stabilised.
Hardy wrote gross premiums of £156.4m in Q1 2011, up 4.5% on Q1 2010’s £149.6m.
The company estimates that its combined loss from the Q1 catastrophes – the Australian floods, Typhoon Yasi, the New Zealand quake and the Japanese quake – is in the range of £21m to £26m.
Hardy Q1 rate increases at a glance
- Marine and aviation: +0.2%
- Non-marine property: +2.6%
- Specialty lines: -2.2%
- Property treaty: +2.1%