Many insurance rates will continue to rise over the next five to seven years, and the average growth rate of premiums will gradually slow only until early next year, says Aon Chairman and CEO Patrick Ryan. He told journalists in Rotterdam that some insurance sectors like professional indemnity will see “a steady increase in premiums for many years to come”.

“We have every reason to believe that as we move out of 2003 and into 2004, there will be a gradual reduction of the rate of increase of premiums,” Mr Ryan said. He also predicted that insurance clients who have been reluctant to buy insurance will come back into the market when they discover they are underinsured. This is expected to boost rates.

He said the major reason for the overall slowdown late this year and early next year is the price correction and increased competition from rapidly growing Bermuda-based reinsurers.

Mr Ryan said insurance brokers are being forced to diversify and offer risk advice and management services for clients instead of just seeking to find insurance cover.