The soft US insurance market will continue to favour buyers into 2010, allowing them to lower costs and improve coverage in a number of areas, according to global broker Willis.

Willis Group Holdings’ April 2010 Marketplace Realities and Risk Management Solutions report found the recession didn’t spark a rise in premiums – and neither have the raft of recent natural catastrophes.

These results reflect a lower demand for insurance products, but also speak for the resilience of the industry during a period of exceptional volatility and “relentlessly” soft rates.

And while recent improved market conditions have helped boost industry capital positions, insurers shouldn’t expect it to get much easier in the months ahead, with sluggish economic conditions, market competition and market churn likely to continue to drive premium rate declines across most classes of business.

Underlying underwriting profitability is also expected to further deteriorate in the near term, while the property market is expected to continue to soften, even for accounts with high cat exposures.

In the casualty sector the long soft market is seeing incumbent insurers who have been reducing pricing in recent years struggling to retain accounts in the face of even more aggressive pricing by competitors.

Meanwhile, the stable directors’ and officers’ marketplace is continuing to offer new and often expansive terms and conditions that may mask changes to come. In 2009, Willis clients experienced a 24% increase in D&O claims from the previous year.