The tough market that property insurance buyers faced in the first half of 2009 eased significantly in the third quarter, according to a report from Chicago-based brokerage Aon Corp.
During the first half of the year, property insurance rates increased between 4 and 5 percent, and more than 20 percent in some cases. But in the third quarter, rates declined to an average increase of 0.2 percent, due to light losses, strong profits for most property insurers and a $463 billion increase in industry surplus by the end of the second quarter, the report said.
About 25 percent of property buyers increased their limits in the third quarter, compared with about 11 percent of buyers in the second quarter, indicating a competitive market, Aon said.
For D&O liability insurance, the hardening market that financial institutions faced shows signs of easing, Aon said. In the third quarter, financial firms saw average D&O rate increases of 3.2 percent, the first time that figure has dropped into single digits in more than a year. The D&O liability market for non-financial firms remains soft, with average rate decreases of 4.9 percent, the report said. New D&O liability insurers, Berkeley Professional Liability, Everest Reinsurance and Endurance USA, have entered the market as insurers with financial troubles in 2008 have recovered.