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LONDON--([ BUSINESS WIRE ])--With 2011 set to close as the worst year on record for natural catastrophe events and against the backdrop of ongoing civil unrest in the Middle East and a deepening economic crisis in the Eurozone, the annual [ Power Market Review ], published by Willis Group Holdings (NYSE: WSH), the global insurance broker, reports that the onset of harder insurance market conditions is currently being restrained by overcapitalisation and the absence of a agame changinga event that would fundamentally alter market expectations and behaviour.

The report, released today, observes that 2011 catastrophe losses have had a predictable impact on underwriting results, with many insurers posting significant underwriting losses in the first nine months of the year. Together with changes in underwritersa acata models, this has had an effect on the cost and availability of acata capacity, with an expectation of further development over the 1 January reinsurance renewal season. However, this has not translated to a general market hardening.

The report notes that the power sector of the market has seen a continuation of aattritionala losses during 2011, and also been hit by three amega claimsa, defined as claims in excess of USD 100m, but remains well capitalised. Global underwriting capacity for the power sector remains close to USD 4bn taking the combined market segments (specialist power, general property markets and mutuals) into account.

Commenting on the reportas findings, Graham Knight, Managing Director of the Willis Power Practice in London, said, aThere has been no meaningful change in the amount of capacity available for the power sector in the last 12 months. There are, however, increasing signs of change in risk appetite. The general insurance market is still reasonably well-capitalised, and the outcome of the forthcoming 1 January treaty renewals will signify to a large extent the direction of the market in 2012.a

Highlights of this yearas report include:

• General overview of power sector claims in 2011 and their impact on the market;
• Focus on the Asia Pacific power market;
• A series of special reports including an engineering study of generator life cycle management and a report on the potential use of captive insurance companies in the power sector;
• Developments in the niche power areas of Renewable Energy, Nuclear and Mobile Power;
• Reports on the state of different insurance market sectors, including Liability, Terrorism and Political Violence, and Construction.

The report further features contributions from a variety of external industry specialists, including a leading London lawyer, a loss adjuster and a forensic accountant, and the UK head of power and utilities business at Ernst and Young.

About Willis

Willis Group Holdings plc is a leading global insurance broker. Through its subsidiaries, Willis develops and delivers professional insurance, reinsurance, and 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 17,000 employees serving clients in virtually every part of the world. Additional information on Willis may be found at [ www.willis.com ].