Pace of Premium Decreases Slows, but Soft Market Continues
October 2010
Soft market conditions continued during
the third quarter, but the rate of decrease slowed, according to the RIMS
Benchmark Survey,™ administered by Advisen Ltd. Every line of insurance
tracked by the survey posted a decrease in average premium, though only
nominally so for general liability and workers compensation.
by
Advisen Ltd.
"Premiums didn't fall much this past quarter, at least not in a couple of
key lines, but the soft market is far from over," says Dave Bradford,
Advisen's Executive Vice President and editor-in-chief of the Survey. "If
insurers avoid large losses this hurricane season, which seems likely at
this point, competition may pick up across all lines. There is still too
much capacity chasing too little premium."
Average premiums for general liability and workers compensation both fell
less than 1 percent. The average property premium declined about 3 percent
and the average directors and officers (D&O) liability insurance premium
dropped 4 percent.
Advisen researchers and other analysts forecast protracted commercial
lines soft market conditions due in part to the lingering effects of the
global recession. Companies that downsized or went out of business have
reduced the amount of insurance premium in the market, encouraging insurance
companies to vigorously compete for their share of a shrinking pie.
Economists have declared the recession over, but recovery has been slow and
written premium remains depressed in many lines.
"Rates in some lines are back to where they were at the depths of the
last soft market," says Robert Cartwright, loss prevention manager for
Bridgestone Americas Holding, Inc., and a member of the RIMS board of
directors. "That might suggest that the market is poised for a turn, but
competition is still intense. Barring a large catastrophe loss, insurance
buyers should continue to enjoy favorable pricing for the foreseeable
future."
About the RIMS Benchmark Survey™
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. Risk managers and buyers of insurance either
contribute directly to RIMS Benchmark Survey™ or by using our "data
participation letter" to authorize their broker to provide the client's
program details. The letter is available at
www.RIMS.org/brokerform or by calling 800–655–6590. Risk management
professionals can also contribute by e-mailing current and prior year policy
schedules to .
Schedules can also be faxed to (212) 655–7453.
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