While nobody expects the soft market for commercial lines property/casualty insurance to continue ad infinitum, rising premiums will likely remain elusive as the economic malaise dampens demand for insurance.
A recent benchmark
“After seven years of falling premiums, I am sure underwriters welcome signs that the soft market will eventually bottom out,” Bradford says. “The fourth quarter, however, was probably a temporary lull rather than the harbinger of higher rates anytime soon. The market remains significantly overcapitalized and demand for insurance capacity is weak as an outcome of the Great Recession.”
According to insurance program renewal information reported by risk managers, generally liability, property and workers compensation policies renewed, on average, with essentially no change in premium. The average D&O premium fell 4.6%. Large companies, those with revenue greater than $1 billion, saw a sharper decline in average D&O premium than did smaller companies – 5.1% as compared to 2.4%. Company size was not a meaningful factor for the other lines of business.
“We have seen more carriers exercising underwriting discipline – walking away from business that does not meet their pricing targets – but it is still a very competitive market,” adds Robert Cartwright, loss prevention manager for