RIMS PRESS RELEASES


SECOND QUARTER RIMS BENCHMARK SURVEY™ SHOWS SOFT MARKET SLOGS ON DESPITE LOWER INDUSTRY EARNINGS 8/5/2008

Heading into hurricane season, average property premium plummets

NEW YORK, N.Y., August 5, 2008--As insurance company earnings begin to show the strain of eroding rate levels, average premiums fell for all major commercial line insurance in the second quarter of 2008, according to RIMS Benchmark Surveyâ„¢, the industry's leading survey of policy renewal prices as reported by North American corporate risk managers.

After dropping sharply in the first quarter, the average Directors' and Officers' (D&O) premium fell a comparatively moderate 6.4 percent in the second quarter. D&O claims related to the subprime mortgage crisis continue to mount, but so far only financial and real estate firms with subprime exposure have experienced price increases.

The 6.1 percent decrease in premiums for property insurance essentially repeated first quarter price decreases for renewals, even though forecasters now predict a severe hurricane season.

The decrease in average general liability premium was nearly five percent, up from two percent in the first quarter. After an unexpected 11 percent drop in the first quarter, the average workers' compensation premium fell just 1.7 percent in the second quarter.

"We are now in hurricane season and a bad storm could bring a quick end to the soft market," says John R. Phelps, ARM, CBCP, CPCU, member of RIMS Board of Directors and director of business risk solutions for Blue Cross and Blue Shield of Florida, Inc. "While the direction of the market could change quickly, pricing trends otherwise continue to be favorable for risk managers. Reinsurers and primary markets are agonizing over falling premiums, but they also are concerned about forecasts of higher than normal hurricane activity this year."

"Insurer's net profit plunged in the first quarter, due largely to falling rate levels," says David Bradford, editor-in-chief of Advisen. "But the property and casualty industry is still overcapitalized, which continues to put downward pressure on premiums. It is still very much a buyer's market, and should remain so, at least through 2008."

In this last quarter, Bernstein Research, part of securities brokerage Sanford C. Bernstein & Co., chose to use RIMS Benchmark Surveyâ„¢ data for its Bernstein Statistical Monitor (BSM), which tracks price trends as a component in analyzing the financial health of insurance underwriters. To learn more about using this pricing data please call 212.897.4820.

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About The RIMS Benchmark SurveyTM
The 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. Advisen introduced the Data Participation Letter that enables risk managers and buyers of insurance to contribute to the RIMS Benchmark Survey™ by designating 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 download into any presentation for senior management. The results of the RIMS Benchmark Surveyâ„¢ are available online or in an annually published book. Visit www.RIMS.org/benchmark for details.

About Advisen
Advisen Ltd. equals success for insurance professionals, driving growth and profitability through the broadest platform of analytics and information services. Designed and evolved by risk and insurance experts, and used daily by more than 100,000 professionals, Advisen combines the industry's deepest data sets with proprietary analytics and applications that drive the risk and insurance lifecycle. Advisen is headquartered in New York with offices in London. For more information, visit www.advisen.com or call 212.897.4800.


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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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