U.S. commercial P&C industry sees softening in 2011 Q1: RIMS

Efforts by commercial underwriters in the United States to hold the line on rate gave way under the pressure of a highly overcapitalized market in 2011 Q1, according to the Risk and Insurance Management Society’s Benchmark Survey.The survey, administered by Advisen Ltd., is an analysis of policy schedules either provided by commercial entities or by their brokers. Property insurance posted the largest decrease, falling 4.2% on average for policies renewing during the quarter, a RIMS release says.D&O premium dropped 2.3%, general liability – the only line tracked by the survey that didn’t record a material decrease – declined only 0.8%, and workers compensation premium fell 3.2%.”Risk managers tell us that insurers are more willing to walk away from under-priced business, and the numbers from the past couple of quarters seemed to show resolve to not let premiums fall further,” said Dave Bradford, Advisen’s executive vice president. “But capacity, as measured by policyholders’ surplus, is at an all-time high in the U.S. property and casualty market. That puts a lot of pressure on premiums, and we saw them slip a bit in the quarter.”Catastrophes in Japan, Australia and New Zealand in 2011 Q1 so far have not had an impact on premiums in the United States. But additional catastrophes could exceed “the tipping point,” sparking higher premiums for property and possibly other lines of insurance, the release added.