P&C, commercial lines to soften further in 2016: Willis

Rates across the majority of the property/casualty and commercial insurance sector will experience further, significant softening in 2016, with property catastrophe exposed lines potentially falling by as much as 15 percent, according to Willis Group Holdings.

Rates across many insurance and reinsurance business lines have declined in recent times as the challenging operating landscape persists.

Trends driving steep and continuous price reductions in the property re/insurance market, which includes a benign loss environment, ample capacity, low interest rates, and heightened competition, have filtered down into the wider risk transfer market, impacting the operations of those in the casualty arena and beyond.

Insurance and reinsurance broker and global risk advisory firm, Willis, echoes this point; “Relatively benign losses and an oversupply of capacity from traditional and non-traditional sources are fuelling current marketplace conditions.”

In fact, Willis expects rates in the property insurance sector during 2016 to fall by up to 12.5 percent for non-catastrophe exposed risks, and by as much as 15 percent for catastrophe exposed risks.

The only line of business Willis states could experience steeper rate declines than non-cat exposed property business, is with general and airlines aviation pricing, which Willis claims could see declines of up to 20 percent in 2016.