U.S. primary E&O rates decline between 5% and 10% in 2009: Guy Carpenter

Primary errors and omissions rate reductions averaged declines of between 5% and 10% in 2009, according to Guy Carpenter.
This was true for insureds exhibiting no material change in exposure and loss activity, the GC Capital Ideas report finds.
Primary insurers sought rate increases in anticipation of increased claims activity due to the recent economic downturn. But the highly competitive market prevented the realization of these increases, according to Guy Carpenter.
“Carriers looking for growth opportunities have entered new states or expanded marketing efforts particularly targeting mid-sized firms,” according to Errors & Omissions Insurance at the January Renewals. “Large law firms have a far less competitive marketplace and as a result rates were not under as much pressure.”
Financial institution E&O was a notable exception. It continued to exhibit double-digit rate increases during the first half of 2009.
“However, these rate increases came down to more modest single-digit increases in the fourth quarter of 2009, particularly for those risks that had already experienced significant rate increases a year ago,” the report notes.