A line by line comparison of respondents’ appetites in the prior year’s survey with those of this year reveals some changes in emphasis. Workers compensation and medical malpractice experienced large growth in percent of respondents who were currently writing, looking for new growth or aggressively seeking growth. The property line grew by 6 percentage points to become only the second line, outside of general liability, where the majority of respondents say they are pursuing business. Inland marine, accident & health and professional liability for insurance agents showed significant declines in business pursuit. Overall, many of the lines saw drops in appetite or remained unchanged. It appears that current economic conditions and elevating loss ratios are keeping carriers’ growth expectations in commercial lines business relatively flat.

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Companies are uncertain of how much coverage to acquire and whether their current policies provide them with protection. One of the roots of the uncertainty stems from the difficulty in quantifying potential losses because of the dearth of historical data for actuaries and underwriters to model cyber-related losses. Furthermore, traditional general liability policies do not always cover cyber risk. In the United States, ISO’s revisions to its general liability policy form consist primarily of a mandatory exclusion of coverage for personal and advertising injury claims arising from the access or disclosure of confidential information.

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Guy Carpenter reports that market pressures at July 1 renewals continued to drive price decreases across virtually all geographies and lines of business, many in the double digit range. As loss activity remained minimal, reinsurers added to surplus capacity and additional capital continued to come into the market via alternative sources. 

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The lines have begun to show deteriorating results in the most recent accident years. 

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Jessica Leong, Lead Casualty Specialty Actuary
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By extrapolating reserving trends, it may be possible to assess the sector’s reserve adequacy. Two cyclical patterns are clear.

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Jessica Leong, Lead Casualty Specialty Actuary
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As demonstrated in Figure 1, carriers released more reserves in 2011 than in 2010. This was in contrast to the general expectation for reserve releases to taper off from their peak in 2008. By analyzing the data closely, it becomes apparent that much of the 2011 calendar year redundancy was from the general liability - claims occurring line of business, shown in Figure 2 (the dotted lines again represent the movement in 2011). Accident years 2008 and 2009 for the general liability - claims occurring line show an unexpected downward turn in 2011, indicating more reserve releases than expected. This is similar to the downward turn for accident year 1992 in 1995.

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Australia & New Zealand

The handful of casualty placements in Australia/New Zealand at the July 1, 2012, renewal continued to operate against a backdrop of a benign claims environment. As a result, reinsurers were constrained in their efforts to increase rates to offset their declines in investment interest income. General casualty lines renewed within a range of down 4 percent to up 3 percent, with reinsurers seeking rate increases of 3 percent to 5 percent.

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Employers Liability/General Casualty - United Kingdom:

Reinsurance rate reductions were achieved on accounts with good performance. Those accounts with a notable PPO exposure and where reinsurance purchasing was at a higher attachment point were subjected to higher volatility loadings.

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David Lewin, Managing Director
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Introduction

Motor liability insurance is legally defined as being part of general liability insurance coverages in Norway. In order to have a valid claim in Norway under the rules of general liability, three cumulative conditions must be fulfilled: a basis of liability must be established, the claimant must prove an economic loss, and such economic loss must be caused by the act that is the basis of liability. The following is a discussion about how motor liability is regulated in Norway.

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Primary rates have plateaued on employers liability (EL), but downward pressure continues to be applied to third-party accounts - both UK and international small and medium enterprise sector. For the larger, more complex international accounts rates are more stable. The third-party account continues to compliment the EL results of many insurers. With the general increase in bodily injury awards, lack of investment returns, pressure on discount rates, PPO effect and general recessionary factors, EL insurance must be subjected to rate increases in the near future.

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