Commercial insurance premiums continued to decline during the second quarter of 2007, according to the RIMS Benchmark Survey, a 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.”
Source: Risk and Insurance Management Society, Inc.
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