Property insurance posted the largest decrease, falling 4.2 percent on average for policies renewing during the quarter. The average workers’ compensation premium fell 3.2 percent and the average D&O premium dropped 2.3 percent. General liability was the only line tracked by the survey to not record a material decrease, declining only 0.8 percent.
Catastrophes around the world in the first quarter of 2011, including the Queensland floods in Australia, the Christchurch earthquake in New Zealand and the Tohoku earthquake and tsunami in Japan, produced billions of dollars of losses to global insurers and reinsurers, but thus far have not had an impact on premiums in the U.S. Additional catastrophes, however, could exceed the tipping point, sparking higher premiums for property and, possibly, other lines of insurance.
“The earthquakes in New Zealand and Japan are reminders as to how vulnerable the U.S. is to devastating catastrophes,” says Frederick Savage, FCII, ARM, RIMS Board of Directors. “A big earthquake or hurricane could cause premiums across the board to change dramatically. It is still relatively early on in the year with the Gulf of Mexico hurricane season still to come but barring a large catastrophe, 2011 looks to be another year of competitive pricing. There certainly is no shortage of capacity in most lines.”
About The RIMS Benchmark SurveyTM
RIMS Benchmark Survey™ is produced by Advisen, Ltd., which collects and analyzes the data and provides the technology infrastructure for the survey’s online services. Risk managers and buyers of insurance either contribute directly to RIMS Benchmark Survey™ or by using our “data participation letter” to authorize 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.
Risk managers who contribute data to the survey can benchmark the structure of their commercial insurance programs, retained loss costs, exposure demographics and Total Cost of Risk (TCOR) against a highly relevant group of peer companies. Additionally, survey respondents can use software personalized and configured for their needs to view detailed schedules of insurance, programs for current and past years and full-color program tower charts. Both benchmark charts and program charts can be downloaded into any presentation for senior management. The results of the RIMS Benchmark Survey™ are available online or in an annually-published book. Visit www.RIMS.org/benchmark for details.