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Member, Beacon International Group, Ltd.
Although soft market conditions continued for most lines of coverage in the third quarter of 2010, reductions in average premiums slowed for general liability and workers compensation insurance, according to a survey released Wednesday by the Risk & Insurance Management Society Inc.
Average premiums for general liability and workers compensation lines fell less than 1%, while the average property insurance premium declined about 3% and the average directors and officers liability insurance premium dropped 4%, according to the "RIMS Benchmark Survey," administered by New York-based Advisen Ltd.
Advisen researchers attributed the continued soft market in commercial lines to the global recession. Companies that downsized or went out of business are buying less coverage, inducing insurers to compete for their share of a shrinking market, the researchers theorized.
“Economists have declared the recession over, but recovery has been slow, and written premium remains depressed in many lines,” Advisen said in a statement.
In fact, “rates in some lines are back to where they were at the depths of the last soft market,” said Robert Cartwright, loss prevention manager for Nashville, Tenn.-based Bridgestone Americas Holding Inc. and a member of the RIMS board of directors, in a statement.
He added that while this might suggest that the market is poised for a turn, “competition is still intense. Barring a large catastrophe loss, insurance buyers should continue to enjoy favorable pricing for the foreseeable future.”
The survey includes data submitted by risk managers and buyers of insurance as well as other information that Advisen collects from brokers and insurers. The results are available online or in an annually published book. Visit www.rims.org/benchmark for details.