RIMS Survey: Some Sector Prices Fall

By Caroline McDonald

NU Online News Service, April 10, 11:09 a.m. EDT,Chicago?A preliminary Risk and Insurance ManagementSociety Inc. survey indicates directors and officers and fiduciarycoverage remains expensive and scarce even as prices soften forproperty and excess casualty risks.

The Benchmark Survey this week "validated what we thought to bethe case with D&O, it's still out of control," said ChrisMandel, RIMS president at the group's annual conference here.

He noted that, "On the other side of the fence, with respect toproperty and excess from a casualty standpoint, it's beginning tomoderate substantially."

The survey, offered online for the first time, provided a"thumbnail sketch" as well as an immediate benchmark for the data,he said.

"Let's fact it, the Benchmark Report of the past was alwaysdated," he said at a press briefing. "It was at least six monthsold by the time it hit hard copy. Now people can go online andreally see what is going on in the current marketplace."

He said that preliminary data released this week confirmed "whateverybody thought might be the case." While Mr. Mandel outlined theresults he did not provide specific numerical information.

Mr. Mandel told National Underwriter that the fact thatdata is so quickly available now, versus in the past when thesurvey was conducted on paper, means that RIMS can access thesurvey more often and may possibly follow trends on a quarterlybasis. He said RIMS is still deciding how to use the data and howoften to report on it.

Mr. Mandel said there is a "crying need" for immediate data. "Inmy culture, management expects me to be able to show how we comparewith others like us, and to be able to do it on a contemporarybasis."

He continued, "Management likes nothing less than to have dataput before them that is antiquated."

The preliminary results found coverage is harder to place,requiring more insurers to secure the necessary program limits.Risk managers are also spending more time to negotiate terms andconditions.

Retentions for the past two years have been rising as riskmanagers have sought to mitigate the impact of high rate increasesand as insurers have attempted to reduce losses from propertycatastrophes, increased tort activity, and corporate governancescandals.

As some coverage becomes more expensive, harder to place andrequires higher retentions, the average limits remain flat,according to the preliminary results?suggesting a continual needfor substantial risk transfer despite rapidly rising costs.

According to RIMS, any financial professional may contributedata to the survey, which is ongoing.

Participants can create charts and schedules of insuranceprograms and interactively compare their data with previous years'survey data. Participants also may use interactive benchmarkingtools to compare costs and programs against continuously updatedmarketplace data, RIMS said.

Mr. Mandel will serve as RIMS president until May 1, when LanceEwing, executive director of risk management for Park PlaceEntertainment Corp., will take over.

The society also announced that Nancy L. Chambers, risk managerfor Waterloo Region Municipalities Insurance Pool and a member ofthe Ontario chapter, was elected first vice president, audit andinvestments.