Commercial Insurance Rates Increase Again in Q4 2011

Time to Get One's Risk Management Groove On!!

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The Soft Market Party is Serving Soggy Pretzels

Business Insurance
By: Mark Hofmann
1/24/2012

Commercial property/casualty rates increased an average of 2.8% during the fourth quarter of 2011 compared with the same period a year earlier, the Council of Insurance Agents & Brokers said in its quarterly survey released Tuesday.

“It's clear from the data that the market continued its upward momentum in the fourth quarter,” Ken A. Crerar, president and CEO of the Washington-based council, said in a statement. “Capacity was still strong, but prices rose in the face of declining underwriting profitability, dwindling reserves and huge catastrophic losses.”

Workers comp leads increases

The council's “Commercial P/C Market Index Survey” found that workers compensation experienced the largest rate increase at 7.5%. Commercial property ranked second with an average increase of 5.7%.

Large accounts reported the smallest increases, with an average increase of 1.8%. Medium-size accounts reported a 3.5% increase, and small accounts reported a 3.1% increase.
By contrast, commercial property/casualty insurance rates dropped an average of 5.4% in the fourth quarter of 2010 compared with a year earlier, the council reported early last year.

Speaking of Workers' Compensation...

Signs point to more unprofitable years ahead for the workers compensation insurance industry, according to a Standard & Poor's Corp. report released Monday. S&P also called the workers comp industry's track record of underwriting results “dismal,” with only three years of underwriting profits being earned during the past two decades.

Insurance Risk Managers Favor Cellphone Ban

John Toay, president, SC Risk Mgt. Consulting and president, LPM Enterprises Inc., says, “As a former police-accident investigator I handled more cases caused by inattention than I can count.”

Property/Casualty 360
By: Caroline McDonald
1/2/2012

Even though the National Transportation Safety Board’s recommendation that all cellphone use be banned in automobiles has been nixed by theU.S.transportation secretary, the suggestion is applauded by some corporate and public-entity risk managers.

The mid-December recommendation by the NTSB calls for all 50 states and theDistrict of Columbia “to ban the nonemergency use of portable electronic devices (other than those designed to support the driving task) for all drivers.”

The safety recommendation also urges use of high-visibility enforcement to support the bans and implementation of targeted communication campaigns to inform motorists of the new law and the heightened enforcement.

U.S. Transportation Secretary Ray LaHood, however, announced on Dec. 22 he won't back the proposal and supports hands-free driving.

Risk managers say they are in favor of a total ban of cell phone usage while behind the wheel.

Lori Seidenberg, vice president, enterprise risk management, and insurance risk manager with Centerline Capital Group inNew York Cityand a director of the Risk and Insurance Management Society Inc. notes, “As a risk manager, I support the implementation of a total ban on cell phone usage. Using cell phones while driving is a hazard for both the passengers in the car you are in and the cars around you.”

While some states allow hands-free usage while driving, Seidenberg says, “This, too, is hazardous, as you still need to look at your phone or PDA to answer or dial the call.”

She adds, “I can see a corporation's perspective, that they want travelling employees to be as efficient as possible” and that an employee driving a long distance might multitask by participating in conference calls or answering emails.

But she says corporations have to weigh the risks and decide which is more important: “employee productivity or a risk of injury or death by distracted driving?” Continue Reading