Insurance rates in UK fell at end of 2013

Insurance rates fell in the UK at the end of last year as part of a pricing decline in most parts of the world except the US, according to Marsh’s latest Global Insurance Markey Quarterly Briefing.

Falling financial and professional liability rates in the UK, Asia-Pacific, and Continental Europe led to an overall decline in rates for those programmes worldwide, while, globally, casualty insurance programmes also typically renewed with a slight decrease, led by falling rates in Asia-Pacific, Continental Europe, and Latin America.

The US was the only region in the global index to show a rise in overall rates.

The market saw lower rates for global property programmes renewing in the fourth quarter, though by a smaller magnitude than in the previous quarter, according to the briefing. In Latin America, the typical rate reduction on renewal approached 10%, driven by competition and available capacity. The Asia-Pacific region also saw falls in property rates averaging 5% as an abundance of capacity across the region, particularly in Asia, kept rates low for non-catastrophe-exposed risks.

Marsh International Division president David Batchelor said: “Strong capital positions, plentiful capacity, and ample competition within the global insurance industry are leading to favourable conditions for clients, especially those with well-managed risks.”

Among other findings of the report:

• Global aviation insurance rates significantly fell at the end of 2013, with most airlines renewing with decreases of between 15% and 20%.
• Rates for catastrophe-exposed property risks in Japan remained largely stable through 2013, albeit still at levels 30% to 50% higher than before the 2011 Tohuku earthquake.
• Directors’ and officers’ liability rates for financial institutions across the eurozone either fell or remained stable in the fourth quarter, with the exception of Italy and France, where rates were up 10% to 20% on average.