Insurance rates for most lines of business in Europe, the Middle East and Africa continued to soften during the first half of this year, but could begin firming soon, a report by Marsh Ltd. reveals.
Strong competition kept rates soft, according to Marsh’s “EMEA Insurance Market Report Midyear 2008.” An exception during the first half was the cost of coverage for trade credit insurance, which increased as a result of the subprime credit problems and financial market turmoil, Marsh said.
“Trade credit insurance premiums are expected to increase further over the next few months as a direct result of the economic downturn,” Jeremy Cooke, head of global market relationship management at London-based Marsh, said in a statement.
There is evidence of increased claims activity in other lines of business, he said, but it remains uncertain as to how that might affect pricing in those areas.
“The general softening trend that we have seen over the past few years is eventually going to come to an end,” said Mr. Cooke. “We expect the market to harden in the near future, a change that could be accelerated by increasing claims.”