No Dramatic Shift to Higher Rates

Amid the unprecedented economic crisis, the First Quarter RIMS Benchmark survey of North American corporate risk managers finds that insurance premiums for businesses continued to slide towards a soft landing, rather than an abrupt reversal resulting in rate increases. While banks and other financial institutions bought directors and officers (D&O) insurance at substantially higher rates, the rest of the commercial insurance market in the first three months of 2009 saw an ongoing trend of little or no change in rates, according to RIMS. Data from the survey indicates that:Â  

 

  • General liability premiums fell 3.8 percent for policies renewing during Q1 2009, compared to a 5.9 percent decline in Q4 2008.   
  • The average workers compensation premium fell 2.5 percent, similar to price decreases of the past several quarters.   
  • The average property renewal was flat for the first quarter compared to a decline of 3.8 percent in Q4 2008. However premiums changes for individual property risks ranged from a decrease of 11 percent to an increase of 14 percent.   

A press release cites Dave Bradford, executive vice-president of Advisen and editor-in-chief of RIMS Benchmark survey, saying: “Insurers struggle against falling rates, increased losses in some lines, and sharply lower investment income due to the credit crisis, but the commercial insurance industry is still overcapitalized. We expect to see a favorable pricing environment for risk managers through 2009.† Check out I.I.I. information on the industry’s financial outlook.  

 

Leave a Reply

Your email address will not be published. Required fields are marked *