To reduce the impact from a firming premium marketplace, I strongly urge the following:- Review your driver hiring criteria (age, minimum # of years commercial driving experience, moving violation criteria) and does it require tweaking?
- Profile your current drivers (age, years experience, # of moving violations and # of preventable accidents). Would you confidently submit this profile to underwriting?
- Secure a copy of your claims history for your current policy period and 3 prior policy periods, request a status on all open/reserved claims and the plan to close claim. It will prove beneficial to also recap details relevant to all larger claims. This is a proactive step when pursuing quotes from the marketplace.
- Profile your claims over a 4 year policy period (look for patterns by accident type, calculate physical damage claims with a couple of higher deductible levels, how many prior accidents involved drivers currently employed and what steps have been taken to reduce reoccurrence).
- Review your accident review policies/procedures and if you do not currently have an accident review program...implement one prior to your next insurance renewal.
- Position your company for maximum control of your insurance and risk management program. No, the sky is not falling however if you have never experienced a genuinely hard insurance market...it can be ugly.
MarketWatch
By: Erik Holm
12/6/20-12
NEW YORK (MarketWatch) -- Travelers Cos. Chief Executive Jay Fishman said his company had increased prices for business insurance clients by 5.2% in October and 5.8% in November, the largest rates increases in several years.
The data from Travelers are the latest evidence the market for commercial insurance is hardening after years of declining prices. That's good news for property-casualty insurers and their shareholders, but will translate into increased costs for the businesses that buy the coverage.
Travelers has often painted a rosier picture on prices than others in the insurance industry, and the latest data are no exception. But the company triggered a rally in property-casualty stocks in October when it reported it had managed to increase prices in the third quarter, and the new figures disclosed by Fishman Tuesday show the trend had continued.
"Our principal tactic right now is to drive rate," Fishman said at a Goldman Sachs financial services conference Tuesday. "This is at the very least [a case of] so-good-so-far, but actually it's beginning to feel even better than that. There is a sense of optimism building around this, and a notion that we can continue to drive this strategy successfully."
There have been other indications of an industrywide price turn in recent days. MarketScout, a Dallas-based insurance exchange, said its data show commercial insurance rates up 1% in November, the first time its market barometer has shown an increase in nearly seven years. Insurance broker Marsh Inc. said Friday that commercial property-insurance prices had increased 1.7% so far in the fourth quarter.
Pricing data released by insurers or by the brokers that arrange the coverage offer a glimpse into what is otherwise an opaque market. The details of individual commercial insurance contracts aren't disclosed by the parties involved, and the buyers, sellers and middlemen are the only ones who know the exact prices of specific policies.
The price increases are coming at a time when insurers have struggled to earn worthwhile returns on their investment portfolios. In years past, insurers could count on their investments to make up some of the difference if they underpriced a policy, but ultralow interest rates mean the margin for error is shrinking.
Previously, Travelers had said it increased business-insurance prices by 2.3% in August and saw a 4.2% price hike in September on returning customers. At the time, executives said the increases were the most aggressive the company had been able to push through since it reached its current form through a merger of Travelers and St. Paul in 2004. Continue Reading
It's Not A One Insurance Company Rate Increase
12/7/11
In addition to Travelers, W. R. Berkley Corp. has increased rates for the past three consecutive quarters. William R. Berkley, chairman and chief executive officer of During his
Berkley has been one of the most outspoken industry professionals saying the long-awaited turn in the property/casualty market has arrived. In October, Berkley said his company posted a 14% increase in third-quarter net premiums written; Berkley said it was the third quarter in a row of increasing rates (Best's News Service,
The Wall Street Journal Reports AIG/Chartis Rate Increases
Speaking at a Goldman Sachs financial-services conference in New York on Wednesday, the head of AIG's property-casualty unit, Chartis, said his company has been aggressively raising rates in the U.S. this year, giving rivals the cover they need to do the same.
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