Marsh explains the new reality of risk in the commercial marketPosted On: Jan. 28, 2015 12:00 AM CST
The commercial property insurance market appears likely to continue softening in the first quarter of this year, according to the head of Marsh L.L.C.’s property practice.
“Generally speaking, it’s a strong buyers’ market,” said Duncan Ellis, Marsh’s national property practice leader in New York during a webcast entitled “The New Reality of Risk” on Wednesday. Non-catastrophe exposed organizations can expect rates that are flat to down 10%, he said.
Property insurance buyers are not alone in enjoying favorable market conditions, noted another speaker. Buyers of aviation coverage “continue to benefit from a soft market” despite some high profile accidents, said Chris Lang, Marsh’s U.S. placement leader, during the webcast. In the marine market, significant capacity is driving rate reductions in several lines of coverage including hull, he said.
Workers compensation rates continued to climb last year, but at a decreasing rate, noted Steve Kempsey, the broker’s U.S casualty leader. Buyers do face some “obstacles” in the casualty lines, though, he said. These include rising workers comp medical costs and the general tort environment on the liability side.
For a particular line of liability — directors and officers — capacity is helping to keep prices stable for public companies, said Brenda Shelly D&O product leader in Marsh’s FINPRO Practice. But she added that Securities and Exchange Commission regulatory activity is expected to increase this year.
Regulatory oversight involving cyber risk is also likely to increase, said Thomas Reagan, Marsh’s cyber practice leader. “Cyber risk is popular on both sides of the aisle” in Congress, he said.