A year ago we were searching for an inflection point between the end of a soft market, and the start of a hard market. So far, that has not happened. Rather, as we report in the 2013 Marketplace Realities report, released today, insurance buyers are facing a complex market featuring mixed conditions.
Price movement and pressure varies depending on the line of business, as well as the buyers’ individual class, geography and loss history, among other things.
Adding to the complexity is a shift in the insurance world to a more customized approach toward risk—risk decisions and risk appetites—all of which ultimately affect the buyer.
Eric Joost, CEO, Willis North America Specialties business, and senior editor of Marketplace Realities, discusses this shift, how its playing out in some specialty lines, and how insurance buyers can best prepare for this new environment where micro trends, rather than macro trends are the dominant force.
Key Price Predictions for 2013
- Non-CAT Risks: -5% to -10%
- CAT-Exposed Risks: Flat
- General Liability: +3% to +7.5%
- Umbrella: Flat to +7.5%
- Excess: +2% to +15%
- Workers Comp: +2.5% to +7.5%; up to +20% in CA
- Auto: +2% to +5%
- Directors & Officers: Flat to +10%
- Errors & Omissions: +5% or more with good loss experience; +10 to +25% with poor loss experience
- Employment Practices Liability: Flat to +10%
- Fiduciary: Flat to +15%
- Cyber: Flat to -3%; more competitive for first-time buyers
- Benefits: +8% to +10%