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    Willis Survey Finds That Buyers' Market for the Commercial Sector's Directors & Officers Insurance Prevails in the First Quarter of 2009

    Average Eight Percent Reduction on D&O Rates; Six Percent Reduction Expected for Second Quarter

    London, UK, April 23, 2009 - Over the last three months, London market insurers reported an average premium reduction of eight percent on renewal business for the commercial sector's Directors & Officers' (D&O) liability, according to Willis Group Holdings (NYSE: WSH), the global insurance broker. The D&O market is expected to continue softening in the second quarter of 2009, with insurers predicting reductions in excess of six percent. This is in stark contrast to the D&O rates for financial institutions where rates are hardening.

    The Willis D&O Index - the latest quarterly survey from FINEX Global, Willis' Financial, Executive Risk and Professional Liability business - asks more than 90 percent of D&O insurers from Lloyd's and the London company market to comment on premium rates and coverage terms for the preceding three months and to make projections for the next three months.

    Commenting on the findings of the survey, Julian Martin, Executive Director of Willis FINEX Global, said, "The commercial sector continues to benefit from a lower claims environment than the financial institutions sector, with rates continuing to soften, albeit at a much slower rate than last year. The anticipated hardening of rates for reinsurance treaties at the year end was less severe than expected, and combined with new entrants to the market, capacity for commercial risks continues to be strong.

    "Insurers are still competing for clients whose risk profiles fit their desired portfolio. In order to achieve a satisfactory renewal with flat or reduced premiums and broad cover tailored to the client's individual requirements, it is important to undergo a thorough risk-profile analysis prior to renewal, which highlights those positive aspects while pre-empting potential areas of concern, like highly leveraged balance sheets, merger and acquisition activity and cash flow issues," said Martin.

    The report found that in the medium term the insurers surveyed expect to see some impact on the commercial sector from the overall deteriorating economic environment, which is expected to lead to increased claims activity, as well as portfolio convergence for insurers providing both commercial and financial institution coverage. However, the report noted that, for now, it remains a buyers' market where broad cover and higher limits are still available at an attractive price.

    The key themes of a recent D&O seminar that Willis hosted for the Norwegian Risk Managers Association are also outlined in the Index. Commenting on the hardening market for Financial Institutions D&O, David Purdy, Executive Director, Willis FINEX in London, said, "Buyers are concerned over the financial security and ratings downgrades for a number of key players in the D&O market. Further insurer downgrades could lead to capacity problems and we are advising our clients to go to the market earlier at their next renewal and be watchful for attempts by underwriters to reduce coverage."

    The Index also contains an article on Individual Liability by Steven Francis, a partner in the Commercial and Regulatory Group of the City Law firm, Reynolds Porter Chamberlain.

    Willis Group Holdings Limited is a leading global insurance broker, developing and delivering professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries, with a global team of approximately 20,000 Associates serving clients in some 190 countries. Additional information on Willis may be found at www.willis.com.

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