Average insurance premium steady in Q2

Commercial insurance premiums either remained flat or decreased slightly in the second quarter of this year compared to the prior year, according to the RIMS Benchmark Survey.
In the second quarter, Directors and Officers (D&O) premiums dropped 3.5%, the largest decrease of any line of business tracked by the Survey. The study indicates that the reduction was due largely to rate cuts for small- to medium-sized businesses.
Average property insurance premiums were largely unchanged, but RIMS says that this average does not reveal the discrepancies between policies in hurricane-exposed regions as opposed to policies in other parts of the country. For example, the study explains that nsureds in Florida and the Gulf Coast states are experiencing massive increases in the aftermath of the 2005 hurricane season. Those in the mid-Atlantic states are also encountering higher premiums, while insureds in the Western and, especially, Midwestern states are enjoying substantial savings in property premiums, according to the study.
“Aside from the increase in property insurance premiums in catastrophe-exposed regions, insurance premiums continue to trend downward,” David Bradford, editor-in-chief at Advisen, says. “We expect to see this trend continue for the remainder of 2006. The industry had a good first quarter which will further fuel competition.”
Joseph Restoule, member, RIMS Board of Directors, membership and chapter services portfolio, says forecasting services are predicting another active hurricane season.
“Risk managers are generally benefiting from softer rates but companies in natural catastrophe-exposed regions aren’t likely to see property insurance pricing conditions improve anytime soon,” Restoule adds.
In the first quarter Advisen analysts predicted general liability, which experienced a slight increase in average pricing in the first quarter, would continue its downward slide in the second quarter, which it did falling 1.2%. Advisen analysts claimed the increase in general liability premiums were a temporary response to a spike in property premium levels. Workers compensation was essentially unchanged.