Insurance Providers

October 2008

Up to this point in time, it is evident that the premium rates for property and casualty coverage have not been appreciably affected by the already critical meltdown of one large insurance company, a number of investment banks and what has been generally known to be the traditional banking system. The founder and present Chief Executive Officer of MarketScout, Richard Kerr, says that the possible impact of the financial collapse of well known banks, insurance companies, and other companies is still not known. He further states that the industry may be beginning to see rate adjustments as soon as October. Prior to the present market collapse, the terms and conditions for most policyholders had already been agreed upon in September.

MarketScout is working with The National Alliance for Insurance Education and Research and conducting individual in person surveys in order to corroborate their data. The surveys are held each month at CRM, CIC and other higher learning sessions. At these sessions those participating are more relaxed and are being given sufficient time to carefully complete the survey. This has resulted in excellent results and data input. CEO Richard Kerr has been able to report that the data being provided by The National Alliance is excellent and well able to corroborate his company’s findings. He says that the data being collected through the survey are closely reflecting their actual mathematical computations. Due to the use of this dual validation process, the MarketScout Barometer is able to claim having an extremely high degree of credibility.

The following is a summary of the rates by coverage and industry class as well as by size of account. During the month of September, business coverage rates for commercial property were down 12 percent. Business interpretation rates were down 9 percent. While BOP coverage was down 8 percent, Inland Marine was down 8 percent. General Liability was down 10 percent and Umbrella and Excess was down 9 percent.

Commercial Auto rates were down 10 percent, and Worker’s Compensation was down 6 percent. Professional Liability was down 9 percent and D&O Liability was down 8 percent. EPLI was down 9 percent and Fiduciary was down 7 percent. Crime coverage was down 8 percent and Surety 7 percent.

Looking at the premium situation for September from the aspect of account size, small accounts up to $25, 000 were down 8 percent and medium accounts of between $25,001 and $250,000 were down 11 percent. At the same time, large accounts of between $250,000 and $1,000,00 were down 11 percent, and jumbo accounts of over a million dollars were down 7 percent.