Soft insurance market conditions set to continue into 2011:

Soft commercial insurance market conditions persisted throughout Europe, the Middle East and Africa (EMEA) in 2010, including India, and are set to continue into 2011; according to a comprehensive report recently published by Marsh. Key commercial insurance market drivers over recent years – including intense competition among insurers, abundant capacity, and relatively few insured catastrophe losses – continued through 2010 and are forming market conditions for 2011, Marsh said in its report, Approach Your Risk with Clear Direction: Marsh’s 2011 Europe, Middle East and Africa Insurance Market Report. The annual report provides detailed information on commercial insurance market trends and conditions for major classes of business and industry and specialty lines. Commenting on Marsh’s new report, Sanjay Kedia, Country Head & CEO, Marsh India said: “The global financial and economic downturn generated increased demand for trade credit and financial institutions insurance but the increased number and size of claims meant insurers were increasingly reluctant to provide cover. The significant rate increases seen during the last 12 to 18 months have now tailed off as economic growth resumes and capacity returns to the market.” Mr Kedia added that the impact of Solvency II, which is set to be implemented in 2013, may affect rates: “Changes to insurers’ documentation, transparency and disclosure requirements will be costly and, as a result, underwriters may attempt to adjust rates to reflect the cost of Solvency II compliance.” Some key findings pertinent to India include – General liability rates in India have declined by as much as 20% over the last six months, particularly for companies which have had no claims. Increased capacity and intense competition are fuelling the pricing pressure. Changes to the Workmen’s Compensation Act 1923 have removed the cap on medical expenses indemnity in India resulting in increased premium rates. While the property market is generally stable, large property risks, over USD 45 million, are able to secure significantly better rates than the smaller risks The Indian motor market remained competitive in the latter part of 2010 and discounts of 10% to 20% were possible for a lot of clients. The complete report is available here. Marsh is also publishing Insurance Market Reports for the US; Canada; Asia; Pacific; and, Latin America and the Caribbean. Marsh’s Multinational Client Service will also publish a report on issues for companies in that sector.