Survey Reports Commercial Insurance Premiums Continue To Decline
July 2007
RIMS Benchmark Survey™ shows that during the
second quarter 2007, directors and officers, workers compensation, and general
liability premiums have dropped while property premiums remain stable.
by
Advisen Ltd.
Commercial insurance premiums continued to decline during the second quarter
of 2007, according to the RIMS Benchmark Survey™, the industry's leading comprehensive
survey of current policy renewal prices as reported by corporate risk managers.
RIMS Benchmark Survey™ second quarter reports show that directors and officers
liability (D&O) continued to drop, falling an average of 7.29 percent since
last year. Workers compensation also continued its steady downward slide, though
at a lesser pace, to 1.82 percent as compared to -3.8 percent in the first quarter.
The slower pace of premium erosion in workers compensation may be due to reform
measures in large states such as California and Florida having now worked their
way through the system, according to an Advisen analysis. General liability
premiums continued a downward trend with a decrease of 1.16 percent.
Reports from the RIMS Benchmark Survey™ also show that property insurance
exhibited no change, despite rate decreases reported by 70 percent of survey
respondents during the second quarter.
"The good news for risk managers is that property insurance has turned a
corner," says Joseph Restoule, CIP, CRM, RIMS secretary and member of the board
of directors. "Although there was no change on average, more than two-thirds
of RIMS Benchmark Survey™ respondents had premium decreases on their property
programs this past quarter, including companies with coastal exposures."
"Premiums have been falling in most lines since the end of 2003, and the
soft market shows no signs of letting up," says David Bradford, editor-in-chief
of Advisen. "However, hurricane season is now underway, and forecasters predict
it will be a much worse than average year. Severe catastrophe losses could not
only send property premiums shooting higher, but could also cause the overall
soft market to come to a halt."
About The RIMS Benchmark SurveyTM
The RIMS Benchmark Survey™ is produced by Advisen, Ltd., which collects and
analyzes the data and provides the technology infrastructure for the survey's
online services. Advisen introduced the "Broker Authorization Letter" that enables
Risk Managers and buyers of insurance to contribute to the RIMS Benchmark Survey™
by designating their broker to provide the client's program details. The letter
is available at
www.advisen.com/ or by calling 800-655-6590. Risk management professionals
can also contribute by e-mailing current and prior year policy schedules to
Benchmark@RIMS.org or by faxing to 212-655-7453.
Risk managers who contribute data to the survey can benchmark the structure
of their commercial insurance programs, retained loss costs, exposure demographics,
and Total Cost of Risk (TCOR) against a highly-relevant group of peer companies.
Additionally, survey respondents can use software personalized and configured
for their needs to view detailed schedules of insurance, programs for current
and past years and full-color program tower charts. Both benchmark charts and
program charts download into any presentation for senior management. The results
of the RIMS Benchmark Survey™ are available online or in an annually-published
book. Visit
www.advisen.com/ for details.
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