Accountants cast doubt on rising premiums despite claims
Specialist insurance accountant Moore Stephens questions whether rates will harden in 2010, despite worsening claims.
In its latest newsletter Insured Interest, Simon Gallagher, head of the firm’s Insurance Industry Group adds that there are likely to be fewer new start-ups until the financial climate improves further and warns that insurers and brokers are likely to face increasing regulatory demands in 2010.
“The key driver currently holding rates back is the apparent ongoing supply of surplus capacity to the market, which may be an indicator that, despite the challenges, the insurance industry continues to be an attractive place for longer-term investment.
Looking ahead
“Looking ahead, 2010 is likely to bring much of the same. Expect rates to continue to move further from soft to hard in niche areas, and risk carriers to invest more extensively in sophisticated and analytical underwriting and claims analysis.
“The written regulations governing the financial sector are intellectually sound, and the FSA handbook is a solid body of work. What remains in doubt is the extent of the resources available to the FSA to enable it to police implementation and compliance, and the will of the commercial sector to embrace what the regulator is trying to achieve.”
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