Study by Aon reveals insurers confident of increase in motor premiums
Nine in 10 insurers are predicting a rise in commercial motor premiums during the third quarter of 2009, according to a report by Aon.
The study said that 91% of underwriters believe rates for motor insurance will rise, which Aon said is a "stark contrast" to the predictions for Q2 in which every underwriter stated there would be no change in rates for this type of cover.
The research also revealed that 40% of underwriters predict a similar rise in rates for casualty/liability insurance and a further 35% believe the situation will be the same for property insurance.
Steve Redgwell, head of broking for Aon's mid to large sized companies, said: “Insurers continue to tell us that they need to see an increase in rates soon in order to return to a sustainable level of profits. However, whilst their reserves are running low the overcapacity in some areas, fuelled by new market entrants and the competition amongst insurers for income, is keeping rates down.
“Aon maintains that, overall, we will see little change for property and casualty insurance, though it is expected that rates will rise for these categories in Q4.
He added: "There is a strong consensus amongst insurers that motor rates will continue to increase slowly through Q3 and Q4 as current losses are simply unsustainable.
“There is definitely an opportunity for businesses to secure good rates in Q3, so long as they have strong risk management practices in place, before the expected rate increases in Q4 2009.”