This Just In...
Prices for many lines of commercial insurance continue to be soft, according to two recent surveys.
The Towers Watson Commercial Insurance Lines Pricing Survey showed an overall one percent decline in pricing for the second quarter 2010. Commercial property, directors and officers’ liability (D&O) and employment practices liability pricing declined, while pricing for most other lines was flat.
Similarly, the Risk and Insurance Management Society (RIMS) Benchmark Survey showed that second quarter pricing was soft due to excess capacity in the commercial market, coupled with lowered demand for capacity due to the recession. Risk managers reported price declines from two to almost four percent across various lines, including commercial property, general liability, D&O and workers’ comp.
A soft market is generally good news for insurance buyers. However, national averages do not always translate into price reductions for individual accounts that have unique risk factors. Averages can be especially misleading for workers’ compensation, because state regulations and an organization’s loss experience are such important factors in pricing.
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