CHANGING APPETITES
Buyers have grown used to price cuts in the property market in recent years, but insurers are now taking a harder stance. Insurers are seeking additional premium wherever possible and applying stricter underwriting, particularly to property valuations. Rate increases seem to be gaining traction as leading markets pare back on unprofitable lines. Still, those viewed as good risks can expect to do better than more challenging exposures.
The turnabout in market tone comes as insurers recognize the impact of the general erosion of rates and terms over the long-term; as major markets adjust their risk appetites, offer lower limits and strengthen underwriting oversight; and as the insurance-linked securities market reassesses after recent losses. The London direct and facultative property markets were showing significant strengthening in rates early this spring,1 and reinsurance treaty renewals may follow suit.
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