New flexibility in the transactional market

could be good for rates in 2010

Jardine Lloyd Thompson Limited (JLT) yesterday spoke at the JLT and XL Insurance Association of Insurance and Risk Managers (AIRMIC) breakfast briefing - 2010 Market Outlook - 'Stable Market or Calm before the Storm' - warning of the disconnect between the Reinsurance and the Insurance markets.

Andrew Sainsbury, a Partner at JLT Reinsurance Brokers Limited ( a sister company of JLT), commented that the reinsurance and insurance markets have been moving at a different pace in recent years and that this trend is likely to continue until insurance rates improve.

He went onto explain that "reinsurance rates are stabilising after several years of upward movement which so far insurers have not mirrored. Against a backdrop of diminished future reserve releases, lower investment income and the expected recessionary impact on claims costs, the necessity of a profitable underwriting result means insurers will need to pass positive rate movements on to their clients. Only at this point in the cycle will the dislocation between insurance and reinsurance rates start to reduce".

Nick Murrell, Head of Property, JLT, explained that in contrast, the insurance market was showing increased capacity through existing insurers and re entry from previous providers as well as some European Markets, "the increased competition and pricing levels are putting insurers under pressure so there will be more opportunity in 2010 for structured programs and flexibility in limits and coverage . We are expecting continued downward pressure on rating and flat rates in some property areas i.e. the food Industry. Clients can benefit from maximising tripartite relationships between themselves, their broker and the insurer, which can encourage new product lines and better understanding that helps insurers to develop solutions for clients rather than one dimensional products".

Enquiries:

Jardine Lloyd Thompson Ltd
Isabella Young
Tel: +44(0)20 7558 3387
EMAIL

Editor's Notes:

About Jardine Lloyd Thompson Limited (JLT)
JLT is a specialist London market insurance broker and risk consultant providing market leading industry knowledge and expertise in specialist fields to some of the world's largest companies.

JLT is part of the Jardine Lloyd Thompson group of companies, a leading risk management adviser, insurance and reinsurance broker and a major provider of employee benefits administration services and related consultancy advice.

Jardine Lloyd Thompson Group plc is quoted on the London Stock Exchange and employs 5,500 people worldwide and through JLT NetworkTM provides our insurance broking services in more than 120 countries.
http://www.jltgroup.com/about/our-businesses/jlt-limited/