Commercial lines continue to soften.
As has been the case in recent quarters, only property insurance showed an increase in the average renewal premium, which was driven substantially by companies in earthquake-exposed regions. Average property premiums rose 2.1% in the third quarter of 2007.
Once again, directors and officers liability posted the largest decrease at 3.9%, while average general liability premiums decreased by 3.2%. Workers' compensation averages, while still falling, are decreasing at a slower rate. The study found workers' comp rates dropped 1.5% during the third quarter, due most likely to the impact of reform measures in several large states, according to an Advisen analysis.
"For the most part, pricing trends continue to be very positive for commercial buyers," said John R. Phelps, member of RIMS Board of Directors and director of business risk solutions for Blue Cross and Blue Shield of Florida Inc. "All indicators point to further improvements in the fourth quarter, barring a major catastrophe."
"The soft market is driven by rapidly increasing policyholders' surplus, which equates to insurance capacity," says David Bradford, editor-in-chief of Advisen. "Underwriting profits and strong investment returns continue to add to surplus, which suggest that this soft market has a long way to go before it reaches bottom."
The RIMS Benchmark Survey is produced by Advisen, which collects and analyzes the data and provides the technology infrastructure for the survey's online services. RIMS is a not-for-profit organization dedicated to advancing the practice of risk management.
Loss/Risk Management Notes is compiled by Senior Associate Editor Meg Green.
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|Title Annotation:||Property/Casualty: Loss/Risk Management Notes|
|Date:||Nov 1, 2007|
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