Rates in the global insurance market are generally firming, according to the recently launched Marsh Risk Management Global Insurance Index. In the second quarter, renewal rates were up 1.4% from the same period last year.

The index tracks rate changes for Marsh clients in 20 major countries that renewed their casualty, property or financial and professional insurance coverage during the quarter.

In the U.S., the value of average property risk exposures increased 1.9% in the second quarter, compared with a 1.3% increase in the first quarter. Roughly 60% of U.S. companies saw an increase in their property rates.

According to the report, increasing property insurance rates resulted from losses from last year's catastrophes, increased focus on the quality of data provided by insureds, rising attritional losses and changes to the methods insurers use to calculate risk-adjusted cost of capital. Rates increased significantly in regions affected by catastrophes, but regions without catastrophic losses saw rates stabilize. Rates for directors and officers liability insurance stabilized after a decade of decline.

Reliance on technology has brought changes for the insurance market, with insurers expanding privacy liability insurance to adjust to the growth of cloud computing, which increases risk because it involves outsourcing information and software to a third party. By the end of 2012, 20% of companies are projected to be using cloud computing to deliver the majority of their software, according to a survey by Cisco Systems.

While cyber insurance often provides good coverage for computers themselves, “they've been a little late to the dance in dealing with the risks associated with what happens when you start outsourcing things,” says Bob Parisi, a senior vice president at Marsh who deals with network security and privacy practice.

Yet pricing for cyber insurance has remained mostly flat with so many new insurers entering the market.

Social media usage has also affected company risk profiles, forcing insurers to consider infringement of intellectual property, Internet usage policies and balancing employees' personal and work-related activities.

“As a risk factor, it can do a lot of it has the ability to cause a lot of people substantial angst,” Parisi says about social media, noting the liabilities involved in password security issues, peer-to-peer sharing or obtaining employee information on Facebook.

Instant Insights /

Global Insurance Rates Firm

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