Risk transfer is an integral and organic part of the great majority of risk management programs. Today, more than ever, the eyes of the boardroom are on risk management programs and on the mechanics and performance of the insurance marketplace. Concerns and objectives pertaining to the cost of risk, the volatility of risk, cash flow, capital efficiency, breadth of coverage, and contract certainty are paramount.

Despite their many common attributes, insurers are unique in regard to their respective experience, expertise, risk preferences, capitalization, and value propositions. The insurance marketplace is multifaceted—rich in the variety of risks underwritten, capacity made available, areas of specialization, underwriting venues, cultures, and business transaction practices. That diversity provides the industry a foundation of profound strength, encouraging and providing competition, choice, responsiveness, and resiliency.

Throughout the course of the financial crisis of the past two years, the insurance segment of the financial services industry has been a relative calm amid the storm. As we saw throughout 2009, insurers continued to accept risks, provide contingent capital, compete intensely for our clients’ business, and pay claims.

As we enter 2010, a number of key questions predominate. Will the economy continue to recover—and how will insurance capacity, competition, and pricing be affected? Will credit become more readily available, helping to ease the squeeze on collateral? How will the Atlantic hurricane season and other catastrophe risks play out? What new risks will appear, and where? How can clients best approach the insurance markets, which must balance the need to grow premium bases with historically low interest rates and below-average returns on investments?

With those questions in mind, Marsh is pleased to present you with the U.S. Insurance Market Report 2010. This report provides information, data, and analysis intended to help optimize insurance program design, program placement, and contract performance. It reflects the experiences and expertise of Marsh insurance professionals who work daily in our placement hubs with the insurance markets to serve clients. Our hub strategy is designed to produce superior results in a number of ways, including:

• Optimizing the large amount of business we bring to the insurance marketplace through the efficiencies associated with our focused marketing efforts.

• Enhancing our market knowledge and expertise by having our placement/hub professionals dedicate 100% of their time to placement of our clients’ programs.

• Developing new and broader product and service offerings, including pre-negotiated coverage enhancements, that insurers provide to Marsh clients.

• Enhancing contract certainty and reducing cost of risk.

As always, we thank all of our colleagues for their efforts on behalf of our clients and for their contributions to the U.S. Insurance Market Report 2010. We offer it to you with our compliments. And we invite you to contact your Marsh client executive or any other member of your client-service team to discuss this report in greater depth.

Joseph M. McSweeny
President, United States and Canada Division