Insurers: Disaster Losses Haven't Boosted Casualty-Insurance Rates
June 09 2011 - 10:24AM
Dow Jones News
Reinsurance executives said at a conference Thursday that recent
costly natural disasters, which have triggered a rise in property
insurance rates, haven't brought about such an increase in the
price of casualty coverage.
Casualty rates aren't likely to improve, they said, until the
companies selling the coverage experience substantial losses from
those lines of coverage, which include environmental risks and
workers' compensation. Such an improvement is a year or more away,
they said.
"There isn't enough pain to see a turn" in the pricing cycle,
said Chris O'Kane, chief executive of Aspen Insurance Holdings Ltd.
(AHL) at Standard & Poor's annual insurance conference in New
York.
Still, rates have largely ceased declining, O'Kane said.
"Not many people are talking about price reductions," he said.
"That's last year's negotiation."
While American International Group Inc. (AIG) has taken billions
in charges in recent months to bolster reserves in its asbestos,
workers' compensation and liability books, other insurers haven't
followed suit in a substantial way.
The price of property and catastrophe coverage, however, has
increased in recent months, after major earthquakes rattled Japan
and New Zealand, floods submerged parts of Australia, and tornadoes
caused higher-than-expected losses in the U.S.
"There is clear evidence that the market is moving up" in that
sector, with Japan and New Zealand seeing some of the most
substantial price increases, said Costas Miranthis, CEO of
PartnerRe Ltd. (PRE). "But I don't think it will have immediate
repercussion on casualty."
-By Erik Holm, Dow Jones Newswires; 212-416-2892;
erik.holm@dowjones.com
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