New York, N.Y. - Commercial insurance premiums took a sharp downward turn in the third quarter, according to the Risk and Insurance Management Society, Inc. (RIMS) Benchmark Survey, which targets current policy renewal prices as reported by corporate risk managers.
Some risk managers report most insurance program renewals had yet to weather the effect of Hurricanes Katrina and Rita and property programs were now experiencing as much as a 20 percent rate increase. The bulk of renewals in the survey had secured pricing before the impact of the hurricanes hit the market.
Survey results indicated renewal premiums down on average more than five percent against the same quarter last year. Directors and officers' liability experienced the steepest decline, falling 8.45 percent. Property premiums fell just under six percent and general liability was down 5.2 percent. Workers Compensation was the only major line that was down less than five percent; that line was down 3.75 percent.
RIMS contracted with New York-based Advisen, Ltd., which collects and analyzes the data and provides the technology infrastructure for the survey's online services, to produce the study.
Advisen survey editors pointed to carriers' financial performance as a catalyst for dropping prices. The P&C sector experienced record profits in the first half of 2005, leading underwriters to drive down renewal rates in a competitive scramble for increased revenue. But the continued soft market has yet to feel the impact of the devastating hurricanes that hit the Gulf region of the United States in August and September.
Risk managers who contribute insurance schedule data to the survey can benchmark both the structure of their commercial insurance programs and the cost of insuring their risk against a highly relevant group of similar companies. Additionally, survey respondents can use customized software to view detailed schedules of insurance programs for current and past years and to create full-color charts. Both benchmark charts and program charts download into any presentation for senior management.
The results of the RIMS Benchmark Survey are available online at www.RIMS.org.
Source: Business Wire
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