Over a year after the Tohoku earthquake and tsunami, Japan is seeing the largest increases in catastrophe pricing with spikes up to 30 percent on renewing programs, according to a report released by Marsh on Tuesday.
Similar prices increases were also seen with insurance and reinsurance programs with exposures to Thailand, Taiwan, Singapore, and New Zealand, according to Marsh’s Global Insurance Market Quarterly Briefing.
“Property insurance rates for insureds with moderate to heavy catastrophe exposures climbed significantly in loss-affected regions; insureds without such exposures generally saw rates stabilize,” the report states.
U.S. companies that did not experience losses saw price increases between 10 percent and 20 percent. The report adds that U.S. companies that did report losses experienced increases over 20 percent, but were focused on a “disproportionate increase of insured values” in catastrophe exposed areas like Florida.
“Underwriting decisions by insurers continued to be driven by last year’s catastrophe model revisions, which began to impact pricing in the second half of 2011,” the report says. “Although this might suggest that increases will moderate in the second half of this year as programs renew, some insurers have indicated they will seek further increases.”
Capacity — while not an issue in the second quarter — could become a problem going forward as the report explains that “a small number” of insurers stopped writing new catastrophe business in the second quarter some European insurers began restricting the capacity offered in certain catastrophe zones.
