Commercial insurance prices to trend upward through 2013: Willis
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Buyers of commercial insurance can expect moderate upward pressure on rates throughout the year, according to an analysis released Wednesday by Willis Group Holdings P.L.C.
In its “Market Realities 2013 Spring Update,” Willis said the “range of anticipated increases is moving slightly higher for most key product lines, although commercial property rates for noncatastrophe-exposed risks and some specialty lines may see slight reductions.”
Willis said it expects prices for noncatastrophe-exposed commercial property risks to be down 5% to flat, while those for catastrophe-exposed risks will be flat to up 5%.
The story was somewhat different for casualty lines, with general liability and commercial automobile insurance prices expected to rise 2% to 10% For workers compensation, Willis projects prices to increase 2.5% to 10%, with prices in California increasing up to 20%.
Willis said it expects rate declines in aviation, health care professional, political risks and surety insurance. It expects rates to rise in the fidelity/crime, kidnap and ransom, terrorism and trade credit lines. The energy, environmental and marine sectors can expect a mix of price increases and decreases, according to Willis.
Willis looked at one non-property/casualty line of insurance as well.
“In the employee benefits space, employers remain focused on elements of the health care reform law that will go into effect in the next few years, particularly the pay-or-play excise tax,” said Willis.
“Rate increase estimates for 2013 remain at 8% to 10%, as insurers pass down the cost of compliance, even as organizations take aggressive steps to stem rising costs through wellness programs and other initiatives.”
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