Lockton Market Update offers fresh insights on global insurance markets

KANSAS CITY, Mo., and LONDON, April 15 /PRNewswire/ -- Global insurance broker Lockton says insurance buyers can expect upward pricing pressure in the coming months in its newly published Lockton Market Update. The online update includes snapshots of three dozen markets with the latest trends facing risk managers, chief financial officers and other executives.

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Lockton reports in an overview that insurers saw underwriting performance deteriorate, investment income evaporate and profitability decline in 2008, a "perfect storm" of negative developments. Diminished capacity and financial pressures may give underwriters greater incentive to maintain pricing discipline than during the last several years.



However, Lockton reports that since insurance capacity remains fairly high compared to historic levels, it is likely that rates will not change rapidly. Certain risks have already seen increases, and rate decreases may be beginning to flatten across the board. There will likely continue to be significant variation by line, industry, and according to loss history.

For example, Lockton has seen significant variation by industry during the past three to four months. In primary casualty lines, Lockton is seeing average rate changes from 10% decreases to increases of 10% for clients with regular loss histories. In property lines, Lockton has seen a range from slight decreases to significant double-digit increases for catastrophe exposed property.


Highlights from the report include:

-- Financial and Executive Risks -- Michael Schwander and Ken Capone of Lockton Denver observe, "The five-year span of reduced premiums, broad terms, and increased capacity in the directors and officers (D&O) market has ended abruptly, especially for financial institutions and venture-backed start-ups. The easy times may be over, but companies that pursue prudent strategies can still achieve satisfactory results." -- Property -- Jim Rubel of Lockton's Global Property Practice says property insurers are feeling the burden of higher losses and reduced capital. "The result is that the buyer's market of the past few years is undergoing a dramatic change, with insurers hoarding capital, curtailing capacity, and raising prices on most catastrophe and loss-prone property programs.


-- Casualty -- Mark Moreland of Lockton's Risk Management team notes that most casualty buyers have still seen favorable renewals, but that may soon change. "Over the next quarter, our view points toward a continuing favorable market with the realization that we are at - or very near - the bottom of the pricing cycle."


The report also provides in-depth analysis of employee benefits and global insurance markets, including aviation, international casualty, political and credit risk, and cargo.

To obtain free copies of Market Update, visit www.lockton.com or contact your local Lockton office.


About Market Update

Editors, features editors and reporters are invited to quote selections from these reports and articles to enhance their own reporting. Please contact the Lockton media team for permission to reproduce an article in its entirety or to speak with a Lockton expert. Lockton retains the rights to this copyrighted work.



About Lockton

More than 3,800 professionals at Lockton provide more than 15,000 clients around the world with insurance, benefits, surety and risk management services, offering an uncommon level of client service. Since its founding in 1966, Lockton has grown to become the 10th largest insurance broker in the world.