* U.S. rates rise as much as 20 percent - Marsh
* Rates likely to continue rising monthly
* 2011 disasters largely to blame
BOSTON, April 10 Property insurance rates are on
the rise around the world, solidifying a turn in the market
after years of declines, insurance brokerage Marsh said on
Just in the United States, customers without significant
exposure to natural catastrophes saw price increases of up to 10
percent in the first quarter, while those in disaster-prone
areas paid rates up to 20 percent higher than their last
contract, the Marsh & McLennan Cos Inc unit said.
"We believe that this trend will continue in the short term,
with the average rate of increase continuing to rise month over
month," Dean Klisura, a Marsh managing director, said in a
Prices are on the rise elsewhere, Marsh added, most sharply
in the countries that have had recent natural disasters.
The company cited two main factors for the increase in
prices: 2011's record-setting catastrophe losses (more than $100
billion by most estimates)and changes in the way insurance
companies model their exposure to risk.
Insurance rates were in sharp decline in recent years, as
most insurers had ample excess capital and competed for business
on price. At one point in late 2010, Barclays Capital said rates
had fallen back to levels last seen in 2000.
Amid those declines, insurers and investors eagerly awaited
the return of what the industry calls a "hard market," where the
companies have pricing power and can raise rates. Last year's
losses appear to have triggered that turnaround.
The recent trend in rising rates has benefited big U.S.
property insurers such as Travelers Cos Inc and Chubb
Corp in particular, helping to offset concerns about
declining investment returns.