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NU Online News Service, Sept. 9, 10:49 a.m. EDT
The drop in insurance prices shows signs of reversal as the directors and officers liability line for the first time in almost three years did not show a downward trend, an online insurance exchange said.
Dallas-based MarketScout in its monthly barometer revealed that for the first time in two years and nine months D&O coverage did not show a downward trend. For the month of August, D&O rates were flat compared to minus 2 percent in July.
“While the overall P&C market is still soft, the market is continuing to moderate with composite rate reductions of minus 5 percent in August 2009 as compared to minus 6 percent in July 2009 and minus 10 percent one year ago,” Richard Kerr, chief executive officer of MarketScout, said in a statement.
“Insurance buyers purchasing D&O coverage are no longer enjoying premium reductions,” he continued. “Professional liability and small commercial (business owners policies-BOP) business are experiencing only very small rate reductions. General liability and workers’ compensation decreased the most with declines of minus 7 percent,” he said.
“It now appears two admitted insurers who traditionally write small commercial business are tightening their underwriting guidelines and no longer accepting tougher classes of business,” Mr. Kerr noted.
“If this more conservative underwriting position holds, we will see some pretty quick rate increases for those small classes of business that must move from admitted to nonadmitted insurers,” he predicted.
After general liability and workers’ comp commercial auto, inland marine and professional liability were the softest lines at minus 5 percent, said MarketScout
These lines were followed by commercial property, business interruption, BOP and umbrella/excess at minus 4 percent. Employers practice liability insurance and surety followed at minus 3 percent. Fiduciary and crime rounded out the downward trend at minus 2 percent.
By account size, small accounts stand at minus 3 percent, while medium and jumbo accounts came in for the month at minus 5 percent, and large accounts were at minus 6 percent.
Large accounts remained consistent with July’s barometer, while small, medium and jumbo accounts improved 1 percent.