Market adapts to rapidly softening rates

Risk professionals have been surprised by the speed that rates on some lines of business have softened, according to the views expressed at the World Insurance Forum in Bermuda. Peter Garvey, president and CEO, Marsh said there was an expectation of a stable market this year but in fact there is no rate stability with lines such as property and D&O softening – “there is just too much capacity at the moment” he said. However Mario Vitale, CEO, Willis North America said that there were still ‘micro markets’ where, even within property, prices were holding. When asked whether it would just take one major natural catastrophe to reverse the softening of property prices Mr Vitale said it would probably take a combination of factors. “Combined ratios are in the low to mid-nineties at the moment,” he commented, “but there are still legacy issues to deal with and if there was a huge catastrophic loss we could see a return of last years problems."