Willis has revealed its market predictions for the coming year and expects to see widespread falling in premium rates with few outliers experiencing growth.
The Willis Marketplace Realities Spring Update
highlights key areas that the brokerage expects to see fluctuation and cyber is among the top priorities for many businesses sectors.
“Cyber renewals saw primary premium increases of up to 10%, with additional increases on excess layers,” the report notes.
“Organisations with point-of-sale (POS) exposure are seeing 10% to 100%+ increases in primary premiums and additional increases in the excess layers due to paid claim activity.
“Smaller organisations (those with revenues less than $1B) are typically on the lower end of the premium ranges referenced above.”
In the opening remarks of the report, chief broking officer for Willis North America, Matt Keeping, notes that it isn’t only cyber that can expect to see increases in the coming 12 months.
“The threat of Cyber-related losses seems to be a matter of if, not when.
“As the push for global markets clashes with the realities of political upheaval and war in many places on the planet, Political Risks are increasingly unavoidable.
“Even if Nat Cat losses are down in the aggregate, the sense of a changing climate bringing an increased potential for widespread catastrophe in heavily populated areas is unavoidable.”
On the other end of the scale, Willis expects premiums in the commercial property space to fall by an average of 12.5 to 15% due to a market brimming with capacity while commercial casualty lines should remain flat.
Keeping stresses that while the update takes a broad approach, many of the findings will vary on a case-by-case basis.
“Individual experiences will vary depending on industry, geography and loss history, but overall we anticipate a marketplace that continues to offer opportunities for buyers.
“With weather and other catastrophic losses remaining below average for another year, and capital hungry for a somewhat predictable return, we see the forces of supply and demand working as expected."
Keeping noted that the downward trend in many lines is set to continue throughout the coming year.
“Rates on most lines of business are meandering downstream, with some approaching white water rapids and others possibly headed for a waterfall.
“Here’s the key difference between the cliff and the waterfall: Going over a waterfall, unlike jumping off of a cliff, is survivable. With policyholder surplus at record levels, we have little doubt about the resilience of the carriers navigating these turbulent waters.”
Other areas of premium growth include employee benefits, kidnap and ransom and fidelity, while marine, terrorism and trade credit are expected to see decreases.