At the end of 2008, all signs were pointing to a near-certain hardening of the insurance markets for chemical risks. A year later, the anticipated hardening did not fully materialize; indications now point to increased competition, which is good news for chemical industry insurance buyers. Ongoing restructuring efforts including plant closings, headcount reductions, and strict expense-control initiatives had a significant effect on companies’ operations. Over the past few years, most clients have been able to achieve both coverage improvements and premium savings in a rather competitive environment.

Looking Ahead

The formation of new underwriting entities and the amount of capacity available should continue to bring greater competition in the market place. Market security will remain an important consideration for clients. We believe that there are two significant wild cards that could affect the market place for chemical companies in 2010 - the potential impact of future natural catastrophes and the general economy’s pace of the recovery.