RIMS PRESS RELEASES


Soft Market Seemingly Hits Bottom, According to RIMS Benchmark Survey 11/15/2011

 

  Three of Four Lines Post Increases in Average Premium in Third Quarter

New York (November 15, 2011) – Average renewal premiums in three of four lines of business tracked by the RIMS Benchmark Survey™ increased in the third quarter, strongly suggesting that an eight year period of falling commercial insurance rates is at its end.

The RIMS Benchmark Survey™ tracks changes in average program renewal premiums for director & officers liability (D&O), general liability (GL), property and workers’ compensation, as reported by risk managers.  The survey is administered by Advisen Ltd.

Of the four lines, only D&O posted a decrease, falling 1.9 percent. The average renewal premium increased 1.2 percent in GL, 1.6 percent in property and 2.1 percent in workers’ compensation.

“Indications have been strong over the past couple of quarters that the market was near bottom, so it’s not surprising to see premiums drifting upward a bit now,” says Dave Bradford, President of Advisen’s Research & Editorial Division and editor-in-chief of the survey. “Sharply higher rates like we saw in 2001 are nowhere in sight, though. The market is still quite competitive.”

Premiums skyrocketed in 2001 and 2002, following a deep and prolonged soft market. The stock market crash of 2000-2002 and massive insured losses from the September 11 terrorist attacks are often cited as catalysts for that hard market.

“Average premiums may be showing modest increases, but it seems pricing generally is still quite favorable in most lines,” says Frederick Savage, FCII, ARM, RIMS Board of Directors. “It would likely take a very large catastrophe or series of catastrophes to trigger a hard market along the line of what we saw a decade ago. Of course, that could happen at any time, but at the moment the insurance market seems to be behaving rationally. Risk managers should budget for somewhat higher insurance costs, but capacity remains abundant, which should help to dampen rate increases.”

 About The RIMS Benchmark SurveyTM

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 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 can be downloaded into any presentation for senior management. The results of the RIMS Benchmark Survey™ are available online or in an annually-published book. Visit www.RIMS.org/benchmark for details.

About Advisen

Advisen’s data, analytics and news offerings are game-changers for 100,000 commercial P&C professionals. For Underwriters, Reinsurers, Brokers and Risk Managers, the resources of Advisen provide productivity and insight into underwriting, marketing, broking and purchasing commercial insurance. Configurable applications allow Advisen to customize each solution and/or craft special offline delivery, too. Our result is a measurable increase in your book of business and more favorable insurance transactions. Visit us at www.advisen.com or contact support@advisen.com to learn more.


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About RIMS

As the preeminent organization dedicated to advancing the practice of risk management, RIMS, the Risk Management Society™, is a global not-for-profit organization representing more than 3,500 industrial, service, nonprofit, charitable and government entities throughout the world. Founded in 1950, RIMS brings networking, professional development and education opportunities to its membership of more than 11,000 risk management professionals located in more than 60 countries. For more information on RIMS, visit www.RIMS.org.

 

For more information, contact:

Josh Salter, RIMS communications manager, (212) 655-6059 or jsalter@RIMS.org


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