EMEA Insurance Market Report (juli-december 2009)

This Europe, Middle East and Africa (EMEA) Insurance Market Report is published by Marsh’s Market Relationship Management EMEA team to keep clients, Marsh colleagues and other stakeholders informed of developments in the insurance marketplace across the EMEA region.

Ten lines of business have been surveyed across 42 countries, including India for the first time. The information has been supplied by Marsh’s insurance placement and business segment leaders in each country. Our commentary and the pricing movement tables will be helpful to clients who are consistently monitoring their insurance and risk management strategies.

Key trends seen in EMEA in the last six months of 2009

Clients across the EMEA region were still able to secure premium rate reductions for most classes of business in the second half of 2009. Excess capacity is common in local casualty, property and motor markets which in turn causes intense competition between local carriers as they fight for market share. New players entering the market are bringing additional capacity and offering new products. This allows clients to reduce their insurance costs and secure better terms and conditions by tendering their business to the market.

However, the ongoing financial downturn has led to inflated loss ratios for insurers in many lines of business and as these types of cover become increasingly unprofitable, carriers are forced to review their pricing. New regulation has impacted rates in many markets, including employers’ liability/workers’ compensation and environmental insurance which has become increasingly sought after following the implementation of the European Union’s (EU) Environmental Liability Directive.

Trade credit and financial institutions insurance have been worst impacted by the global economic downturn and high loss ratios have caused insurers in these lines of business to increase rates significantly. At the same time, insurers are reducing their capacity despite increased demand for these types of cover, restricting the market even further.

The ongoing claims notifications seen by some financial lines clients will likely mean further rate increases in the next six months. On the other hand, the most competitive lines of business are expected to remain unchanged in the absence of any significant loss event, given the excess capacity in some local markets. Otherwise, the majority of EMEA countries reported that they generally expect local markets to stabilise over the course of 2010.