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July 03, 2012 at 07:22 AM
The global insurance market continued to firm in the second quarter of 2012 continuing a trend that began in the third quarter of 2011, according to the Marsh Risk Management Global Insurance Index. The index showed that although rates rose during the second quarter the increase was less pronounced than in the previous two quarters.
Marsh’s new index is comprised of client renewal data on property, casualty, and financial and professional lines of business, weighted by premium placed, taken from 20 large economies across all continents.
The composite index, incorporating all these lines, of 1.014 in the second quarter of 2012 indicates that rates at renewal have increased by 1.4% compared to renewal rates in the second quarter of 2011.
According to information from Marsh’s industry experts, the increase in property insurance rates is being driven by unexpected adverse loss developments from last year’s major catastrophes, an increased focus by insurers on the quality of data provided by insureds, a rise in attritional losses, and changes to the way insurers are calculating their risk-adjusted cost of capital.
While the index shows that insurance rates for financial and professional lines declined slightly after rising during the previous two quarters, the overall trend suggests that the multiyear slide in liability insurance rates is coming to an end.
In other industry news:
American International Group Inc., New York, N.Y., will resume using its brand name in public in a move to recognize the company’s turnaround, Chief Executive Bob Benmosche said.
AIG, which received $182 billion in government bailouts during the financial crisis, has all but shunned its own name for years. AIG units reorganized under rebranded holding companies, and employee ID badges did not even identify the company by name—a measure, Benmosche said, to protect employee safety.
But with recent advertising tests showing higher response rates and lower customer acquisition costs for AIG-branded products, the company said it was time for a change.
The Chartis property and casualty business will be known simply as AIG starting this fall, while the SunAmerica life businesses will be known as AIG Life and Retirement.
Other AIG entities will keep their names but add an AIG tag to their logos.
The government remains the largest shareholder in the company with a 61% stake.
Aetna, Hartford, Conn. (NYSE: AET), has been selected by the State Employee Health Commission for the State of Maine to administer the group health plan for its 33,000 members and their dependents. Beginning July 1, 2012, Aetna will manage the delivery of medical, pharmacy benefits and Stop Loss benefits for the State’s active employee and pre-65 retiree populations.
In conjunction with the administrative services contract, Aetna will work with health systems in Maine to build accountable care networks to support the employee plan. Aetna also expects to be able to leverage these relationships for other employers and consumers in the state.
