A new report released by Marsh, the world’s leading insurance broker and risk adviser, reveals that insurance premiums in India have hardened across most sectors. However, the commercial insurance market in most of Europe, the Middle East and Africa (EMEA) remained stable in the second half of 2009.
Marsh's report, Competition Nets Rewards - EMEA Insurance Market July-December 2009, analyses 10 major commercial insurance lines across 42 countries including India for the first time. The report finds that rates in India in the second half of 2009 have showed an increase across sectors such as property, healthcare, directors’ and officers’ liability (D&O), professional indemnity and general liability. However, organisations across most of EMEA continue to secure premium rate reductions for most types of insurance.
The study found an increase in insurance rates in India for the following sectors:
• Property: rate increase up to 10%
• Healthcare: rate increase of 10% to 20%
• Professional indemnity insurance: rate increase up to10%
• Directors’ and officers’ liability: rate increase of 10% to 20%
• Casualty (general): rate increase up to10%
However, the EMEA region as a whole had shown a reduction across various classes of business:
• Property: rate reductions of up to 40% to 50%
• Motor: rate reductions of up to 40% to 50%
• Employers’ liability/workers’ compensation: rate reductions of up to 20% to 30%
• Professional indemnity insurance: rate reductions of up to 10% to 20%
• Directors’ and officers’ liability: rate reductions up to 10%
• Casualty: rate reductions of up to 20% to 30%
The only exception has been trade credit. Increases in trade credit insurance coverage ranged from more than 50% in Greece and Lithuania. The average increase in the UK and Ireland ranged from 10% to 30% and in India from 10% to 20%.
The report highlights several trends in the Indian market:.
• Rates in the Indian property market have bottomed out and clients are now facing some premium increases, particularly those with poor risk profiles. It is anticipated that the market will continue to harden during 2010.
• D&O rates in India increased markedly over the course of 2009 following some high-profile corporate fraud payouts. These losses have increased awareness of D&O insurance in India and prompted more local companies to look at purchasing this type of cover.
• The general liability market has been very competitive in India in recent times. Rates hit a low at the beginning of 2009 and have now started to increase with clients likely to face small premium increases in the second half of 2010. Unless new capacity comes to the local market in 2010 rates are set to continue to harden.
Commenting on Marsh’s new report, Sanjay Kedia, Country Head & CEO, Marsh India said: “Marsh’s latest figures reveal that current conditions in many industry sectors mean that organisations have the opportunity to capitalise on competition in the insurance market. They can do this by strengthening their insurance programmes, thus protecting themselves against the financial consequences of a wider range of risks.”
The majority of countries across EMEA generally expect local markets to stabilise over the course of 2010, which is good news for insurance buyers in the region.