Hard Market - Not Yet
The Benchmark Survey published recently by the Risk and Insurance Management Society (RIMS) reports that except for Directors and Officers (D&O) insurance, premium rates were little changed in the first quarter of 2009.
General liability premiums fell 3.8 percent for renewals in the first quarter ’09, compared to a 5.9 percent decline in the fourth quarter ’08, risk managers reported. The average workers’ compensation premium fell 2.5 percent. Property renewal premiums were flat in the first quarter compared to a decline of 3.8 percent in the fourth quarter’08. The D&0 premium increase of 3.0 percent related exclusively to financial companies as a result of losses from the subprime mortgage market and the credit crisis.
“Most risk managers continue to see flat or slightly lower premiums at renewal” said Daniel Kugler, a director of RIMS and risk manager at Snap-On, Inc. “The insurance market is still very competitive and, while some insurers are predicting an imminent hard market, there are few signs that rates will rise sharply anytime in the near future,” he observed.
Dave Bradford, editor of the RIMS Survey, said “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.”