News

Market Update                         Summer 2011

We have seen an unprecedented increase in Tornado activity in April, with over 1,000 tornado reports - the most notable, a category F5, pulverizing Tuscaloosa, Alabama. As summer approaches, the threat of tornadoes tends to move north and east as the jet stream shifts northward.  In May, a deadly tornado plowed through Joplin, Missouri.  Then on June 1, Springfield, Massachusetts was devastated.  June is also the start of the hurricane season.  Weather Services International, a Weather Channel company, predicts 15 named storms, with 4 hurricanes of a category 3 or greater. This, combined with new wind modeling (calculating probabilities of loss) is already impacting property rates, particularly in coastal areas and areas vulnerable to wind damage.  Reinsurance pricing has increased, which will undoubtedly put pressure on underwriters to raise rates. While there appears to be an abundance of capacity, expect to see property premiums on the rise.

General liability has seen low single digit increases on placements with loss experience within acceptable ranges.  Risks with adverse loss history are seeing double digit increases and vary depending on loss forecasts.

Other casualty lines appear to remain stable, for now.