More than three-quarters of insurers in the architects and engineers professional liability insurance market increased their rates in 2013 — although these hikes were not necessarily what they had anticipated at the beginning of the year — while insurers continue to push for more increases, according to a broker's survey.

A total of 79% of insurers participating in the survey by McLean Va.-based Ames & Gough reported improved premiums, while the remaining 21% generally saw rates remain at previous levels.

Among insurers who increased rates, 18% had increases of between 6%-10%, as compared with the 33% who had expected such increases in last year's survey.

A total of 64% saw increases of 3%-5%, compared with the 54% who had expected this level of hikes, and 18% raised rates by up to 2%, vs. the 11% who expected this increase, according to the survey by the specialty insurance brokerage and risk management consulting firm.

More than 71% of the insurers had an increase in professional liability insurance business in 2013, while just over 21% indicated their premium levels were flat, and one insurer had a reduction in business, according to the survey.

All of the insurers that experienced an increase in premium attributed the growth to new business, and 70% also pointed to clients renewing with larger exposures, which consequently led to higher premiums.

“In large part, this reflects the gradual economic recovery that's contributed to a rebound for architectural and engineering firms,” said the survey which adds that the insurer whose business had shrunk in 2013 cited a loss of clients to other insurers.

%%BREAK%%

Half of the insurers reported their overall claims experience was better in 2013 compared with prior years, while 43% had no change. “Of course, professional liability is a long-term exposure, meaning claims may take a number of years to be resolved,” said the survey.

“Thus, any reported improvement in the underwriters' 2013 claims experience may stem from the absence of additional claims from projects affected by the 2008 financial collapse,” it states. “Indeed, only one insurer reported its claims experience worsened in 2013; none did so in 2012 or in 2011.”

Meanwhile, insurers continue to seek further premium rate hikes, said the survey. “Countering this push is the reality that capital continues to flow into insurance and reinsurance as institutional investors seek new uses for their investment capital,” says the survey. “This has worked to hold down any wild swings in rates and created what many would consider a stable market.”

Commenting on the survey, Ames & Gough president and chief executive officer Dan Knise said in a statement, “We're still seeing steady competition in the professional liability insurance market, especially for the business of smaller A/E firms and those insurers consider as having desirable risk profiles — good loss history, lower risk projects, and strong risk management. At the same time, A/E firms with higher-risk projects or poor claim histories generally are seeing their incumbent insurers push for larger rate increases at renewal.”

The 14 insurers participating in the survey account for about 75% of the overall U.S. market, according to the survey. Copies of the survey, “PLI Market 2014: Market Remains competitive Despite Insurers' Push for Rate Hikes,” are available by emailing info@amesgough.com.