Multinationals moving away from domestic markets, says Aon report
European risk managers are increasingly placing their faith in Lloyd's and the London market as an alternative to domestic insurers, according to Aon.
A report released by Aon at the Federation of European Risk Management Associa-tions (FERMA) forum into the state of the European property market, found European multinational companies were more willing to seek alternative insurance markets than ever before.
The report, based on research undertaken in 11 European countries, said that large European companies traditionally relied on domestic insurers for their property cover. Chairman of Aon's property global practice group, Nick Maher, said that this was due to long-standing direct relationships between companies and insurers. "In many European markets, the concept of insurance broking is relatively new and strong ties have existed for many years between Europe's leading multinationals and the big insurance companies. As a result, there has been little encouragement to take a more global approach."
But the report found that they were now more likely to look for alternative markets if they were unhappy with the terms or rates offered locally, with Lloyd's and the London Market listed as the preferred markets, ahead of Paris, Munich and Zurich. The report described the US and Bermuda as "some way behind" in terms of their popularity with European risk managers.
The report said: "With its unique concentration and diversity of experience, expertise and capacity, the London Market, and Lloyd's in particular, has maintained if not enhanced its position as a key centre for the European property market."
According to the report, European property rates have peaked and, while still high, are on the verge of falling with slight rate reductions evident in some sectors.
But the report also said that coverage remained narrow, with terms and conditions remaining tight.