LONDON, July 15, 2014 (GLOBE NEWSWIRE) -- Overcapacity in the international construction, property & casualty markets in the first half of 2014 has resulted in rate reductions of up to 30% for commercial insurance buyers, according to Willis Group Holdings (NYSE:WSH), the global risk adviser, insurance and reinsurance broker.
This is primarily driven by benign loss activity and softening conditions in the global reinsurance market, which is having a trickledown effect to the primary insurance market, according to Willis's Q3 2014 Construction, Property & Casualty Market Review. Over and above rate reductions, corporate insurance buyers are also benefitting from an increase in available natural catastrophe capacity.
With no withdrawals of capacity from the construction market in the last six months, capacity is at an all-time high, according to the report. At the same time the volume of construction projects in many parts of the world has reduced, intensifying competition between carriers for premium volume and market share in the construction insurance market.
Meanwhile, the international property & casualty insurance market continues to witness an influx of capital. Provided that detailed risk information is available, carriers are prepared to offer insurance buyers improved coverage, particularly improved contingent business interruption extensions, noted the report.
In the general property market, premium rates are continuing to decrease by between 10% and 15% on claims free business. Even larger reductions are available for buyers who can clearly demonstrate robust risk management practices and detailed risk information, claimed the report.
Commenting on the report's findings, James Nicholson, Head of Broking and Industry Practice Groups for Construction, Property and Casualty at Willis, said: "Our view is that soft market conditions are likely to continue without necessarily threatening the profitability and solvency of carriers, provided that they actively manage their portfolios. For their part, corporate insurance buyers can achieve substantially better than average pricing through the provision of good underwriting data, the use of analytics to drive pricing and through strong relationships with carriers. The outlook therefore remains very favourable for corporate buyers and more particularly for the well-informed."
To view the report in full, please click here.
Willis Group Holdings plc is a leading global risk adviser, insurance and reinsurance broker. With roots dating to 1828, Willis operates today on every continent with more than 18,000 employees in over 400 offices. Willis offers its clients superior expertise, teamwork, innovation and market-leading products and professional services in risk management and transfer. Our experts rank among the world's leading authorities on analytics, modelling and mitigation strategies at the intersection of global commerce and extreme events. Find more information at our website, www.willis.com, our leadership journal, Resilience, or our up-to-the-minute blog on breaking news, WillisWire. Across geographies, industries and specialisms, Willis provides its local and multinational clients with resilience for a risky world.