Favourable outlook for EMEA Insurance market in 2015: Marsh

EMEA Insurance buyers benefitting from falling rates, rising competition.

Marsh, a global leader in insurance broking and risk management, today releases its annual Europe, Middle East and Africa (EMEA) Insurance Market Report 2015. According to Marsh’s research, competition among insurers continues to drive down rates and capacity remains abundant in many markets in EMEA, particularly for clients with attractive risks and good loss histories.

In its EMEA Insurance Market Report 2015, Marsh reports that rates for motor insurance have remained stable or have reduced by an average of up to 10% in 25 of the 34 countries analysed across the region. Poland and Zambia both experienced average reductions in excess of 30%.

Rates for directors and officers (D&O) liability insurance in EMEA remained stable or average reductions of up to 10% were reported in 32 countries. Only the Czech Republic and Russia experienced rate increases for D&O insurance in EMEA in 2014.

Graeme MacMillan, CEO, Marsh’s UK Markets Division, commented: “Organisations should generally expect favourable market conditions in 2015, as the EMEA insurance market continues to be characterised by enduring insurer competition and a benign catastrophe loss environment.

“In particular, motor insurance rates have continued to decline across EMEA. While motor insurance is now a loss-making line of business in many EMEA countries, there is little sign of this trend abating. Clearly, insurers are taking a strategic view and are using competitive motor insurance rates to gain leverage with their clients.”

In the UK, Marsh reports that rates declined on average by 0-10%, or have remained stable, across all major lines of insurance, with the exception of employee benefits rates. As a result of increasing insurer competition and capacity in the UK market, more firms are taking the opportunity to negotiate broader coverage terms and enhanced wordings for their insurance provision.

Mr MacMillan continued: “In the absence of rate increases, underwriters are placing a greater emphasis on risk evaluation and selection, offering only the most competitive terms to clients that are able to demonstrate a robust approach towards risk management.

“We expect analytics to continue to push the boundaries of the global insurance market’s traditional model and influencing behaviour. As insurers increasingly vie for business, many are investing heavily in analytics and product innovation, to improve the delivery of their services and grow their market shares.”

Among the other findings of the report:

• Although trade credit insurance rates are still falling across EMEA, claims are continuing to increase, particularly in Africa and parts of Eastern Europe. This will have an adverse effect on premium rates in 2015, for all but the most attractive risks.
• Enquiries relating to cyber risk insurance products have continued to increase across EMEA, as firms become increasingly aware of their exposures.
• While Marsh expects to see further entrants to the political risk insurance market in 2015, claims incidences may increase following the expiration of policy waiting periods for credit and political risk/physical damage events.