What will it take to harden the property insurance market? Something worse the enormous tragedy afflicting Japan, suggests an update on the earthquake/tsunami from investment bank Keefe, Bruyette & Woods:
Overall we expect pockets of price hardening as a result of the recent events, but do not expect a broad hard market to result. Japanese pricing should be up substantially, and with the 4/1 major renewal date around the corner, we expect to hear more on this in the coming weeks. Rates in Australia and New Zealand should also see sizable increases due to losses from numerous recent catastrophe events in that region. The combination of catastrophes in Australia, Japan, and New Zealand will create significant losses for the industry, but we believe that the industry will remain overcapitalized following these events. As a result, we do not expect an overall global turn in pricing, but the combined losses could help stem price declines and have a modest positive impact on California earthquake and Florida wind renewals.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio