Global broker Willis expects US commercial property premiums on non-catastrophe-exposed risks to fall 10-12% next year.

New capacity and an absence of major disaster losses have softened the market, with rates for catastrophe-exposed risks also likely to drop, by 5-10%, its Marketplace Realities report says.

“The downward pressure is being driven by an influx of alternative capital to the insurance industry, particularly the segment devoted to catastrophic property risk.”

Willis North America COO Eric Joost says the increase in capital “makes a more inviting marketplace” for insurance buyers.

There are “clear benefits” to the new capital vehicles, some of which represent “real innovation”.

But “the reaction has not been all positive, to say the least”.

Overall, premiums are expected to rise on 14 US insurance lines including workers’ compensation, auto, employee benefits, cyber, executive risk, crime/fidelity, healthcare professional, construction, kidnap and ransom, political risk and terrorism.

Drops are expected on eight lines: property, errors and omissions, aerospace, energy, environmental, marine, surety and trade credit.

Mr Joost says future industry innovation will come with “the advent of big data, insurance style – the increased access and ability to work with the data related to the possibilities of risk transfer”.

Big data is driving WillPLACE, Willis’ “ground-breaking” placement platform, he says.