LONDON Oct 5 Insurance prices barely rose in
the three months to September as abundant supplies of capital
allowed insurers to compete aggressively even after paying out
near-record natural disaster claims last year.
The cost of insurance edged up by 0.9 percent during the
third quarter compared with the previous three-month period,
insurance broker Marsh said in a survey published
The Marsh survey tallies with others showing that average
prices have risen only moderately despite insured losses of $116
billion in 2011. Last year was the industry's second-costliest
for natural disasters because of Japan's Tohoku earthquake and
Thailand's worst floods in a half a century.
Historically, insurance prices have jumped sharply in the
wake of big payouts by the industry as less well-funded insurers
retrench, freeing those still in the market to charge more.
Analysts say the subdued price reaction this year reflects
plentiful supplies of capital as investors fleeing depressed
bond and equity markets put money into insurance instead, often
by buying insurance-linked securities such as catastrophe bonds.
Insurance prices began rising in response to last year's
catastrophe claims in September 2011, having previously declined
or stagnated for about three years amid intense competition.
Companies renewing their insurance during the third quarter
had to pay 1.4 percent more than a year earlier, Marsh said.
The broker said the cost of insuring property against
natural catastrophes rose, but could fall back again amid a lack
of major disasters so far this year.
Marsh also said banks were having to pay more for liability
insurance, reflecting worries over the impact of the euro zone
sovereign debt crisis.