(1888PressRelease)
December 06, 2007 - Businesses in most countries and industry sectors will continue to enjoy competitive liability premiums for the fifth consecutive year in 2007, according to Look Beyond The Obvious, a new report from Aon on global liability trends. However, the report’s Developing Risk Matrix reveals that insurers are increasing their vigilance on emerging and already recognised risks and insurance buyers need to be aware that coverage restrictions are on the horizon.
Following a benign year for natural catastrophes, rates have fallen worldwide with plentiful liability capacity and increased competition expected to drive further reductions in 2007. Expectations range from stable rates to reductions of up to 25% in the Americas, up to 30% in Europe Middle East Africa and up to 40% in Asia Pacific, although reductions may not necessarily materialise in countries with a rising liability regime, such as new joiners to the EU.
However, over half of the 53 countries examined in the report experienced increases in both frequency of claims and levels of awards in 2006, reflecting the rising global trend of a compensation culture. Equally evident are the evolution of class or group actions in Europe, the emergence of punitive or similar damages in Asia and insurers’ growing pursuit of coverage restrictions for risks such as toxic mould, silica and electromagnetic radiation, phenomena predominantly first experienced in the USA.
In the UK, akin with most other marketplaces, rate reductions in 2007 are expected on average to be less generous than in 2006 but most companies are still expected to enjoy up to a further 10% reduction. Health risks arising from lead, nanotechnology, sunburn and obesity feature among those emerging risks currently on insurers’ monitor lists and are to be watched for the future.
The report advises buyers to focus strongly on policy coverage for developing risks in addition to pricing and to monitor US litigation techniques and trends closely, as these will continue to influence legal systems and insurance marketplaces around the globe.
Simon Thompson, executive director of Aon Global, said: “This is an opportune time for buyers to look beyond immediate premium savings and to prepare for the longer term by targeting and preserving coverage critical for their businesses. While there may be minimal overt pressure now, past indicators suggest that when developing risks manifest themselves more robustly, or when a buyers’ market, such as this, becomes a sellers’ market, insurers will impose coverage restrictions. Identification and mitigation of key developing risks today will support the prudent buyer when facing a less receptive marketplace in the future.”Corgi insurance services
Aon UK is ranked by A.M. Best as the number one global insurance brokerage based on brokerage revenues and voted best insurance intermediary, offering classic car insurance, high value home insurance and insurance services for Corgi registered members.
