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Third-quarter premium increases in three of four lines tracked in a regular benchmark survey for the Risk & Insurance Management Society Inc. suggests an end to eight years of declining commercial property/casualty insurance prices.
Of the lines tracked in the RIMS survey, only directors and officers liability showed a premium decrease in the third quarter, declining 1.9%. Average premiums increased 1.2% at renewal in general liability, 1.6% in property and 2.1% in workers compensation, RIMS said Tuesday.
“Average premiums may be showing modest increases, but it seems pricing generally is still quite favorable in most lines,” Frederick J. Savage, director of risk management at San Ramon, Calif.-based Chevron Corp. and a member of the RIMS board of directors, said in a statement announcing the survey results.
He added that it would take a large catastrophe or series of catastrophes to trigger a market hardening like that prompted by stock market downturns in the early 2000s and the Sept. 11, 2001, terrorist attacks.
“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,” Dave Bradford, president of Advisen Ltd.'s research and editorial division and editor-in-chief of the survey conducted for New York-based RIMS, said in the statement.
Mr. Bradford added that “sharply higher rates like we saw in 2001 are nowhere in sight,” with the market remaining “quite competitive.”
Mr. Savage advised risk managers to “budget for somewhat higher insurance costs,” but also said abundant capacity in the market should dampen rate increases.