Marsh recently came to some conclusions about rates in the fourth quarter of 2015. In some business lines — the giant insurer concluded — renewal rates fell as much as 15% when compared to the fourth quarter of 2014.
Competition, fewer catastrophes and too much capacity are the reasons and they will continue to shape insurance and reinsurance rates in the foreseeable future. “The U.S. commercial property insurance market softened further in 2015, continuing a two-year trend that is expected to continue into 2016, barring any unforeseen changes in conditions,” Marsh’s report said.
The typical rate change at renewal:
• Non-catastrophe exposed firms saw an average rate drop of 5% to 10%.
• Modestly exposed firms saw decreases between 5% and 15%.
• Those with the most exposure saw decreases of 5% to 15%.
The report added, “As the year progressed, rates generally decreased for buyers due to minimal catastrophe losses, insurer competition, and an influx of alternative sources of capital.”
Marsh’s report disagrees a bit with others doing rate tabulation. MarketScout said the first half of the year saw a 4% average rate decline.
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