Benchmark Provides More Timely Results; ValidatesProperty, D&O Trends Chicago

Preliminary results from the Risk and Insurance ManagementSociety Inc. Benchmark Survey, available online for the first timein its history, suggest that property and excess casualty coverageprices appear to be softening, while directors and officers andfiduciary coverage continues to be expensive and difficult tofind.

“The survey validated what we thought to be the case withD&O. Its still out of control,” said Chris Mandel, president ofthe Risk and Insurance Management Society Inc., at its annualconference here.

“On the other side of the fence, with respect to property andexcess from a casualty standpoint, its beginning to moderatesubstantially,” Mr. Mandel said.

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

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

“Lets face 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.”

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.

“In my culture, management expects me to be able to show how wecompare with others like us, and to be able to do it on acontemporary basis.” He continued, “Management likes nothing lessthan to have data put before them that is antiquated.”

In addition to the price trends, the preliminary results alsorevealed that coverage is harder to place, requiring more insurersto secure necessary program limits. Risk managers are also spendingmore time to negotiate terms and conditions.

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 yearssurvey data. Participants also may use interactive benchmarkingtools to compare costs and programs against continuously updatedmarketplace data, RIMS said.

Reproduced from National Underwriter Edition, April 21, 2003.Copyright 2003 by The National Underwriter Company in the serialpublication. All rights reserved. Copyright in this article as anindependent work may be held by the author.