Half of the insurers reported their overall claims experience was better in 2013 compared with prior years, while 43% had no change. “Of course, professional liability is a long-term exposure, meaning claims may take a number of years to be resolved,” said the survey.
“Thus, any reported improvement in the underwriters’ 2013 claims experience may stem from the absence of additional claims from projects affected by the 2008 financial collapse,” it states. “Indeed, only one insurer reported its claims experience worsened in 2013; none did so in 2012 or in 2011.”
Meanwhile, insurers continue to seek further premium rate hikes, said the survey. “Countering this push is the reality that capital continues to flow into insurance and reinsurance as institutional investors seek new uses for their investment capital,” says the survey. “This has worked to hold down any wild swings in rates and created what many would consider a stable market.”
Commenting on the survey, Ames Gough president and chief executive officer Dan Knise said in a statement, “We’re still seeing steady competition in the professional liability insurance market, especially for the business of smaller A/E firms and those insurers consider as having desirable risk profiles — good loss history, lower risk projects, and strong risk management. At the same time, A/E firms with higher-risk projects or poor claim histories generally are seeing their incumbent insurers push for larger rate increases at renewal.”
The 14 insurers participating in the survey account for about 75% of the overall U.S. market, according to the survey. Copies of the survey, “PLI Market 2014: Market Remains competitive Despite Insurers’ Push for Rate Hikes,” are available by emailing firstname.lastname@example.org.
Article source: http://businessinsurance.com/article/20140310/NEWS07/140319976