Property/casualty insurance rates are increasing, according to Willis’ 2012 Marketplace Realities report.

Some lines are firming modestly, but there is no uniform market hardening, the global broker says.

The report predicts that catastrophe-exposed accounts, for which rates climbed 5-10% in the fourth quarter of last year, will increase a further 7.5-12.5% this year.

The $US108 billion ($104 billion) of global property losses recorded last year, combined with a revised windstorm model from Risk Management Solutions, will push catastrophe-exposed rates higher, says Willis. But the report says abundant capacity and the continuing weak economy have tempered the upward pressure.

In casualty lines, Willis says that rates for more than 75% of insureds will increase modestly on renewal, driven by gradual increases in revenue and rating exposures, and predicts rate increases up to 7.5% this year.

Other predictions include: non-catastrophe-exposed risks will stay flat, workers’ compensation rates will rise 2.5-7.5%, employment practices liability rates will stay flat or decrease by as much as 5%, and directors’ and officers’ rates could range from a 5% decrease to a 5% increase.

Chairman and CEO Joe Plumeri suggests in the report that the predictions should be considered in the context of the question the Marketplace Realities authors were asked: “If, in 2007, a risk cost $100 to insure, what would it cost to insure that same risk today?”

The answers varied by line, but averaged $70, a 30% fall.

“What insurers offer, what they are selling, in the end, is their own resilience,” he said.