What a difference a few months can make. Based on data from recent renewals, Willis has revised its Property forecast for the second half of 2013 to predict that the rates for non-catastrophe exposed accounts will fall by 5% to 10%; while catastrophe-exposed accounts will remain flat or experience decreases up to 5%. Willis’s previous forecast, published in April, predicted flat rates to 5% price increases for catastrophe-exposed accounts.
Dave Finnis, National Property Practice Leader, Willis North America, explained the reason for the turnaround.
“The additional movement in the Property market is being driven largely by new capacity entering the marketplace, and represents a significant shift from our forecast just a few months ago, particularly on catastrophe-exposed programs. Recent renewals were oversubscribed.”
Absent a large loss event, the downward pressure trend is likely to continue for the remainder of the year. Finnis noted, however, that conditions differ for accounts directly impacted by Superstorm Sandy. Pricing for these accounts will continue to vary widely depending on loss history and severity, he said.
The 2013 Marketplace Realities special summer update was published today, available here.