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Average insurance rates still on the rise: Marsh

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Average insurance rates still on the rise: Marsh

Global insurance rates continued to harden during the fourth quarter, but rates increased at a slower pace than the third quarter, Marsh Inc. said Wednesday.

The average rate increase was 1.2% for business that renewed during the fourth quarter compared with 1.4% for business that renewed during the third quarter of 2012, according to Marsh's Risk Management Global Insurance Index, a weighted average of rate change activity.

While Superstorm Sandy is not expected to be a market-changing event, U.S. buyers are unlikely to see rate reductions on property lines during early 2013, particularly if they suffered losses from the storm, Marsh noted.

During the fourth quarter of 2012, 57% of U.S. buyers of property all-risk coverage saw a rate increase at renewal, with 16% reporting no change in rate and 27% experiencing a rate reduction, according to Marsh's research.

Most U.S. buyers of general liability coverage also saw rate increases at renewal in the fourth quarter, according to Marsh, with 52% seeing an increase, 22% seeing no change and 26% seeing a decrease.

On workers compensation business that renewed during the fourth quarter, 51% of buyers saw a rate increase, 19% saw no change and 30% saw a decrease, the research showed.

For excess and umbrella coverage, 54% of U.S. buyers whose business renewed during the fourth quarter saw a rate increase; 31%, no change; and 15%, a rate decrease, Marsh said.

And most U.S. buyers of directors and officers liability insurance whose business renewed during the fourth quarter saw a rate increase, with 68% reporting an increase; 12%, no change; and 20%, a rate decrease.

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Rates for property catastrophe business in many areas continued to climb during the fourth quarter of 2012, Marsh noted.

In Australia, Germany, Indonesia, Japan, South Africa the United Kingdom and the United States, rates increased as much as 10%, Marsh said. In India, property catastrophe rates rose 10% to 20% on average. In Italy and Turkey, rates rose 20% to 30%.

In the United Arab Emirates, rates for property catastrophe business decreased 20% to 30% while they remained largely stable in most other areas, Marsh said.