Property Insurance Rates Up
Across the Board for January
BY MARK E. RUQUET
RATES ON Commercial All Risk Prop- erty policies saw across-the-board increases in January, climbing by
nearly 6 percent in some cases, says insurance broker Marsh.
In its “Marsh Insights: Benchmarking
Trends,” Marsh says rates rose an average
of 5. 3 percent last month on all renewals
based on its Global Benchmarking Portal
for January 2012.
Catastrophe-exposed risks experienced
the sharpest increase, with average
increases of 5. 7 percent. Non-catastrophe
exposures rose 5.2 percent on average.
Marsh calls the overall rate changes
“relatively modest” in 2011’s fourth quarter.
“While clients with significant losses in
2011 or heavy [catastrophe] exposures are
more likely to experience considerable rate
increases at their upcoming renewals, the
January 2012 chart illustrates that insurers
are continuing their upward pressure on
rates across the board,” Marsh says.
The trend toward increases is expected
to continue through the first quarter of this
year “as this transitional market continues
to shift,” says Marsh.
Marsh says catastrophe-exposed risks
experienced the sharpest increase,
with average increases of 5. 7 percent.
Non-catastrophe exposures rose 5.2
percent on average.
managed decreased rates. This compares
with 51 percent seeing increases in 2011’s
fourth quarter and 15 percent seeing no
change. Thirty-four percent experienced
decreases, which was the same as Q3 2011.
“While this analysis provides further
evidence of the trend of ever-rising share of
placements with rate increases, it is clear that
there are flat-to-modest decreases available
for some clients,” the report says. NU
XL Group Posts $515.5M Q4 Loss
BY CHAD HEMENWAY
XL GROUP says it took a 2011 fourth- quarter net loss of $515.5 million on a large impairment charge and
Catastrophe losses during the last
quarter of 2011, net of reinsurance and
reinstatement premiums, were $194.9
million—but the company’s results were
mainly driven by a non-cash goodwill-
impairment charge of $429 million,
BY CHAD HEMENWAY
CATASTROPHE LOSSES from Q4 2011 and prior quarters significantly weighed on earnings for three Bermuda specialty
insurance and reinsurance companies.
Everest Re Group reports an 86 percent
drop in fourth-quarter earnings, and the com-
pany posted an $80.5 million loss for the year.
Fourth-quarter net income was $41
million, compared to $302.5 million during
2010’s fourth quarter.
Results include $370.7 million in catastrophe losses, pre-tax and net of reinstatement
premiums, which includes $218 million in
losses from the flooding in Thailand, says
Hamilton, Bermuda-based Everest Re.
The catastrophe-loss total also includes
increased loss estimates from earthquakes in
Japan and New Zealand earlier in 2011 and
$50 million in additional catastrophe reserving.
Meanwhile, Pembroke, Bermuda-based
Axis Capital Holdings says fourth-quarter net
income dropped about 70 percent to $80
million. For the year, net income was $9
million compared to $820 million for 2010.
Axis predicts $64 million in pre-tax losses
from the Thai flooding, and a $75 million
increase in loss estimates for other catastro-
phes throughout 2011.
Alterra Capital Holdings reports net
income of $30.9 million, down about 49
percent from $79.7 million for 2010’s
Alterra says it recorded $55.5 million in
catastrophe losses, pre-tax. About $30
million was due to fourth-quarter events and
the balance is attributable to events from
the first nine months of 2011.
However, on a brighter note for these
companies, premiums are up. Everest Re
says gross-written premiums during the fourth
quarter increased 10 percent.
Gross-written premiums during the last quarter of 2011 increased 5 percent at Axis Capital,
but President/CEO John Charman says that the
market turn “may require a few years to regain
the pricing eroded over the last five or six.” NU