Property/casualty rates predicted to rise 3% at midyear: Buyer surveyPosted On: Jul. 10, 2012 12:00 AM CST
Commercial property/casualty insurance prices are expected to show a 3% increase at midyear compared with the same time last year, according to Barclays Capital Inc.'s midyear 2012 Commercial P&C Insurance Buyers' Survey.
According to Barclays, its survey of 75 risk managers from U.S. and Canadian companies—39% in the Fortune 1000—showed an expected 4% price increase in property insurance at midyear and a 2% increase in casualty prices, the first casualty insurance price increase shown in the survey since early 2004.
Of the risk managers surveyed, 23% characterized the property/casualty market as hard, up from 7% six months ago. None characterized the market as soft, down from 13% six months ago.
The survey showed risk managers expect policy terms to remain stable, with 90% expecting no change from last year's terms. About 35% of those surveyed characterized the renewal process as more difficult than a year ago, with 64% saying the renewal process was similar in difficulty to last year.
The survey showed the percentage of respondents that reported switching their business among insurance brokers rose to 8% in the current survey vs. 3% six months ago. Most risk managers surveyed expect broker fees to be flat this year, with 82% expecting them to be unchanged, 12% expecting to pay a higher fee and 5% expecting to negotiate a lower fee.
Barclays noted that its survey respondents are mostly large, national accounts likely to compensate their brokers on a fee basis, as opposed to small and middle-market insurance buyers whose broker compensation is more likely to be commission-based.
Barclays said that while fees are likely to remain stable, insurance broker commissions could increase with property/casualty premiums.