Third quarter of commercial market softening highlighted by RIMS survey

Average commercial insurance premiums dropped for a third consecutive quarter, according to the latest release of the RIMS/Advisen Benchmark Survey of corporate risk managers in North America.
The survey finds softening across many lines of business on third quarter renewals, with property, excess and fiduciary liability dropping 2-3%, and general liability and directors’ and officers dropping less than 1%. This was also the second straight quarter where more polices received decreases than received increases.
“The resilience of this soft market is certainly clear from the pervasive price declines across the major lines,” says Daniel H. Kugler, RIMS vice president, membership. “For another quarter, we saw most policy renewals were less expensive than last year and now prices across the board on most lines have declined.” He adds that this corresponds with RIMS’ original prediction that declines would be seen at least through the end of 2004.
The one sore spot remains workers’ compensation, where premiums rose more than 1.5% during the quarter. And pricing declines are not excessive in any of the segments, adds David Bradford, editor-in-chief at Advisen. “The key questions remain: will premium rates get much lower? And how long will the soft market last beyond 2004?” he says.