JLT's Murrell says increased competition is pushing insurer prices down
JLT Reinsurance Brokers partner Andrew Sainsbury told an Airmic briefing that insurers will have to underwrite for profit because reinsurers have raised prices.
Sainsbury said: “Reinsurance rates are stabilising after several years of upward movement, which so far insurers have not mirrored.
“Against a backdrop of diminished future reserve releases, lower investment income and the expected recessionary impact on claims costs, the necessity of a profitable underwriting result means insurers will need to pass positive rate movements on to their clients."
JLT head of property Nick Murrell warned of oversupply among insurers keeping prices down.
“The increased competition and pricing levels are putting insurers under pressure, so there will be more opportunity in 2010 for structured programmes and flexibility in limits and coverage,” he said. “We are expecting continued downward pressure on rating and flat in some property areas.”