Marsh has announced that almost half of U.S. property insurance policies have been renewed in the current quarter have been at higher prices.
Marsh said 48 per cent of property policies renewed in the fourth quarter have been at a rate at least 1 per cent higher. Nearly 20 per cent of policies have been renewed at rate increases of more than 10 per cent.
In addition, Marsh said nearly a fifth of renewals were done at flat rates with the prior policy.
With more than $70 billion in disaster losses worldwide this year, insurers are anticipating what they call a “hard market” or a period of pricing strength where they can consistently raise customers’ rates.
That would follow years of sharp price declines that in some cases left rates at decade-long lows. Marsh said across all policies, the average rate increase this quarter is 1.7 percent.
“While the market is not classified as ‘hard,’ it is increasingly difficult to achieve cost savings and more insureds are faced with modest increases at renewal,” Marsh said in its regular benchmarking report.
Source : Reuters
