Willis: Mixed Commercial Market Forecast for 2013

An annual report by Willis expects North American insurance buyers will see a mix of rising and falling commercial property/casualty rates in 2013.

Modest rate increases in casualty, executive risks and several specialty lines will be balanced by declining rates for non-catastrophe-exposed property programs and other risk areas, according to Willis’ 2013 Marketplace Realities report.

Property risks can expect flat renewals, while buyers with non-CAT exposed risks will experience decreases in the 5 percent to 10 percent range, Willis says.

Meanwhile casualty lines are experiencing some upward movement and general liability buyers are facing increases in the 3 percent to 7.5 percent range, with excess rate increases running higher on some programs.

Willis experts also project price firming will continue into 2013 for some specialty risks, including primary directors and officers liability, employment practices liability and some segments of construction.

In introductory remarks, Willis Group Chairman and CEO Joe Plumeri noted that there are still big savings to be had, even in a market that is firming after years of soft rates. Brokers and buyers  just have to work a little harder and look a little deeper to find them.

Here are the key price predictions for 2013 outlined in the report:

Property:

Non-CAT Risks: -5% to -10%

CAT-Exposed Risks: Flat

Casualty:

General Liability: +3% to +7.5%

Umbrella: Flat to +7.5%

Excess: +2% to +15%

Workers’ Comp: +2.5% to +7.5%; up to +20% in CA

Auto: +2% to +5%

Executive Risks:

Directors & Officers: Flat to +10%

Errors & Omissions: +5% or more with good loss experience; +10 to +25% with poor loss experience

Employment Practices Liability: Flat to +10%

Fiduciary: Flat to +15%

Cyber: Flat to -3%; more competitive for first-time buyers

Benefits: +8% to +10%

Business Insurance has more on this story.

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