Undeterred by mounting claims from the meltdown of the sub-prime mortgage market, the average directors and officers liability (D&O) premium fell 19 percent in the first quarter, the largest decrease of all the lines of business tracked by Advisen for the RIMS Benchmark Survey™. Continuing the trend of steady, moderate decreases exhibited over the past two years, general liability premiums fell another two percent. After demonstrating a moderating trend over the course of 2007, workers compensation price decreases surged during the first quarter, falling 11 percent. In a clear indication that competition is returning to catastrophe-exposed regions, property premiums fell 6 percent-the largest quarterly decrease since Hurricane Katrina.
"We expected to see the soft market continue into 2008," says John R. Phelps, ARM, CPCU, member of RIMS Board of Directors and director of business risk solutions for Blue Cross and Blue Shield of Florida, Inc. "Not only are soft market conditions on-going, they appear to be accelerating, due in no small part to the excellent combined ratios for key markets. This bodes well for insurance buyers this year."
"Frankly, we were surprised to see downward momentum building at this pace," says David Bradford, editor-in-chief of Advisen. "It is an indication of just how overcapitalized the commercial property and casualty insurance industry is. Rapidly deteriorating rate levels will probably wipe out insurer underwriting profits this year, but if there are no major catastrophes, premiums should still continue to fall for a while."
About The RIMS Benchmark SurveyTM
The RIMS Benchmark Survey™ is produced by Advisen, Ltd., which collects and analyzes 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.