Global Insurance Capacity
for Power Generation
by Market Sector
Large Capacity
Providers
5%
Specialist
Power
Overview of Insurance-Sector
Employment Changes*
Sept 2011
Employment
Oct 2011
Employment
452,900 452,000
27,500 27,500
47,700 48,600
638,300 641,400
373,500 374,900
417,400 419,000
65,100 64,100
128,200 127,900
General
Property
Market
Mutual
Companies
Insurance Subsector
P&C Direct
Reinsurers
Claims Adjusters
Agents/Brokers
Life Direct
Health/Medical Direct
Title & Other Direct
Third-Party Administration
All Other Insurance-Related Activities 53,400 53,500 +100
Net Total 2,204,000 2,208,900 + 4,900
*Data are through October 2011 and are preliminary (i.e., subject to later revision); not seasonally adjusted.
Source: Insurance Information Institute/ U.S. Labor Department’s Bureau of Labor Statistics
Change
-900
0
+900
+ 3,100
+1,400
+1,600
-1,000
-300
Total Estimated Global Capacity: $4 Billion
Source: Willis Database
E LOSS RATIOS FOR MOST insurers in the energy-insurance
sectors continue to run at levels of 100+, according to Willis’
“Power Market Review, December 2011” report. Willis says some
insurers are withdrawing from the market, but that has not yet
had a significant impact on supply and demand levels. The
broker says, in terms of underwriting returns, the power sector
has not performed well over the past five or six years; the
well-capitalized market remains competitive, with limited
opportunity for underwriters to achieve targeted rate increases.
E PROPERTY AND CASUALTY carriers shed 900 jobs in October compared
to September, but the insurance industry overall added 4,900 positions in
October, according to an Insurance Information Institute analysis of the
latest U.S. Labor Department’s Bureau of Labor Statistics data. For P&C
carriers, employment is down 8. 3 percent from July 2008 to October 2011.
Agents and brokers, both life and non-life, added 3,100 jobs in October compared to September, but I.I.I. President Robert Hartwig notes that “this merely
reverses the nearly equivalent drop in September,” when agents and brokers
shed 3,400 positions compared to August.
NOVEMBER 2011 RATES
By coverage class
Commercial Property
Business Owners’
Policy
Workers’ Comp
Business Interruption
General Liability
Employment Practices
Liability
Commercial Auto
Umbrella/Excess
Professional Liability
Directors & Officers
Liability
Inland Marine
Fiduciary
Crime
Surety
+2%
+2%
+2%
+1%
+1%
+1%
+1%
Flat
Flat
Flat
Flat
Flat
Flat
Flat
F AFTER RELEASING its latest “Market
Barometer” report
for November,
MarketScout said the
soft-market cycle “has
finally broken” after
nearly seven years.
November 2011
represents the first
composite-rate
increase since the
soft market began in
February 2005, says
MarketScout CEO
Richard Kerr. The average P&C rate increase
stood at 1 percent for
the month, with
commercial property,
business owners’
policies and workers’ comp all seeing
2 percent increases.
Compared to the same
month a year ago,
commercial rates for
every coverage class
are at least flat.
UNDERWRITING RESULTS
P&C Industry Composite*
Loss/LAE Ratio
Expense Ratio
Combined Ratio
Accident-Year
Combined Ratio
Operating Ratio
9 Months
2010
73.7
26.1
100.2
104.9
88.6
9 Months
2011
82.4
26. 3
109.0
113.1
99.1
Change
+ 8. 7
+0.2
8. 8
8.2
10.5
*50 large U.S. P&C insurers with 53% of industry net premiums written
Source: ALIRT
E ALIRT INSURANCE RESEARCH says its analysis of 50 large P&C
insurers over the first nine months of 2011 shows weakening underwriting results for the group, with the combined ratio climbing to 109 (from
100.2 for the same period in 2010). Surplus for the companies fell
4.2 percent over the first nine months of 2011 due to underwriting
losses, shareholder dividends of $8 billion and net capital losses of
$4.6 billion. The group did, however, see direct and net premiums rise
by 2.2 percent and 3. 6 percent, respectively, over that time period.
