Higher premiums for Liability insurance
In General Liability insurance, developments in the last few months of 2001 were very dynamic. The generally poor results of industrial Liabili- ty business were depressed even further by several major losses in the pharmaceutical industry. As a result, industrial premiums in the USA and Europe increased sharply. This trend was intensified by the terror- ist attacks in the United States although General Liability insurers seem to have been less exposed than other class providers. Demand for facul- tative reinsurance for major risks showed a moderate increase. Because of reductions in capacity, this trend is likely to continue through 2002. In commercial Liability insurance, premium increases were implement- ed in the year under review but were not of the same magnitude as in industrial business. After 11 September, differences emerged in the way terrorist risk is treated in Liability policies. Exclusions seem possible for only particularly exposed risks.
Marine insurers reduce capacities
In Marine insurance, substantial premium increases were seen virtual- ly across the board at the beginning of the year. The restrictive policy adopted by the international Marine insurance industry led to a sus- tained reduction in capacities. In the year ahead, this will be felt, in particular, by operators of large warehouse facilities, which many Marine insurers intend to insure on only a very small scale in the future. In the financial year 2002, the trend towards higher premiums is thus expected to continue, so a marked improvement in results is anticipat- ed for the class as a whole.
Aviation insurers’ results shaped significantly by terrorist attacks
In the international Aviation insurance market, competition for market shares eased back considerably, especially in the wake of the events of 11 September in the USA. Even prior to the terrorist attacks, insurers were able to put across higher premiums; their occurrence had the effect of accelerating the process. The volume of insurance capacity avail- able was appreciably reduced. The results of the Aviation insurance market in 2001 were shaped significantly by the events of 11 September.
Developments in Life insurance markets
The terrorist attacks also had a substantial impact on the US Life rein- surance market. The availability of affordable catastrophe cover will be a permanent challenge in future, so profitable growth can be expected in the years ahead. In Western Europe, the Life insurance market showed satisfactory growth, although premium revenues from new business generally increased more sharply than incomes from existing policies.
Developments in insurance markets 13