Cover Story: State Of The Market

Hard Market Over For Most Buyers, NU SurveyReveals

Price hikes moderating, with many expecting no increaseor decline in premiums in next renewal

The days of automatic double- or even triple-digit commercialinsurance premium increases appear to be over for most riskmanagers and their brokers, and it seems to be easier to findadequate capacity at more flexible terms and conditions, the latestNational Underwriter “State of the Market” survey hasrevealed.

Indeed, a significant percentage of brokers and commercialinsurance buyers surveyed expect rates to remain the same or evendecline, limits to rise, and terms and conditions to become morenegotiable going forward.

“Commercial property-casualty premiums, while still on the rise,are not increasing as dramatically as a year or even six monthsago,” concluded analysts at The Response Center, an independentresearch firm based in Fort Washington, Pa., that conducted thesurvey on behalf of NU and the study's sponsor, Zurich'sNorth American Commercial Business division, based in Schaumburg,Ill.

“Both brokers and commercial insurance buyers agree that wecontinue to shift toward a softer market,” The Response Center saidin its survey report.

Indeed, only 25 percent of the 208 brokers interviewed thisMarch rated the hardness of the market as a 6 or 7 (with 7 equaling“very hard”) compared with 49 percent last fall. Commercialinsurance buyers were in tune with their brokers, as only 31percent of the 208 customers surveyed rated the market as a 6 or 7,compared with 49 percent in the fall of 2003.

“Across the board, although the majority of both brokers andcorporate customers who participated in this spring's researchexperienced premium increases, significant minorities report nochanges or actual declines for both general and specialty lines ofbusiness,” The Response Center noted. “The percentages of thoseinterviewed in spring 2004 who report no changes or declines are upsubstantially from those interviewed in fall 2003.”

Looking forward, brokers and customers are both optimistic intheir expectations for 2004, the survey found. “For mostlines, increases inpremium costs are still expected, but most predict increases willnot be nearly as high as those experienced in the past two years,”The Response Center reported.

In surveying NU subscribers about the state of specificmarkets, The Response Center found that “among the general businesslines of insurance, brokers and customers expect significant reliefthrough either unchanged premiums or premium declines in commercialproperty, commercial auto and umbrella excess liabilityinsurance.”

In specialty lines, “premiums for directors and officersinsurance and medical malpractice insurance two lines in whichcustomers experienced steep increases in the last two years (197percent for D&O and 41 percent for medical malpractice in lastfall's renewal cycle) are expected to stabilize somewhat in 2004,”The Response Center found. “In fact, customers predict that medicalmalpractice premiums will decrease by 2 percent, on average.”

In examining the responses of the two groups surveyed, for anumber of lines brokers generally reported a higher percentagepremium increase in their last renewal and expected a bigger hiketo come than did the buyers who were queried.

One explanation for this is that while the buyers surveyed weremostly full-time risk managers at larger firms, the agent/brokercommunity reading NU deals not only with such mega-buyers,but also with middle-market and Main Street insureds, whichgenerally have less leverage and fewer options than their biggerbrethren. This dichotomy tracks with the results of the “2003 RIMSBenchmark Survey,” put out by the Risk and Insurance ManagementSociety and Advisen, a consulting firm, both based in New York.

“The hard market has not affected all insurance buyers equally,”the report noted. “The [Benchmark] Survey documents thedisproportionate impact of rate increases on smaller companies.Companies with revenue less than $1 billion saw their cost of riskincrease almost twice as much as large companies between 2001 and2003, probably due to their lack of buying clout and less access toalternatives to traditional insurance.”

However, another dynamic might be coming into play for brokers,particularly when predicting price hikes for the next renewal,according to Keith Thomas, senior vice president overseeingZurich's North America D&O business.

“Some of it, from the broker's perspective, could be that theirbusiness is becoming more competitive, and accounts are moving notonly among insurers, but among brokers, over pricing issues,” hesaid. “Brokers don't want to project a lower price than they arecertain they can deliver.”

Indeed, Zurich officials commented that while there is stillroom for price moderation in most lines, deep price reductionsacross-the-board remain unlikely anytime soon because there is nodeep reservoir of investment income to count on to wash awaypotential underwriting losses.

“It would be very hard to have a sustained soft market in excesscasualty right now,” said Robert Shine, executive vice president ofZurich's North America excess casualty specialty business. “Therehas been some significant tort reform proposed, but not yet passed,and we dont see the loss trends changing dramatically short-term.The market is also not as healthy capital-wise as it was before thelast soft market.”

Greg Maguire, executive vice president and director of the propertygroup for Zurich's North America Global Corporate Businessdivision, added that “a lot of the post-9/11 capital is new andfragile. A major event man-made, like terrorism, or a naturalcatastrophe could stop this moderating market in its tracks.”

In the property-catastrophe market in particular, the absence ofa major disaster has resulted in “the opposite of the perfectstorm.'” said Mr. Maguire. “We have had the perfect calm.'Reinsurance capacity could dry up again in a hurry if there isanother event, and that would reverberate throughout themarket.”

The NU survey found that brokers and buyers not onlyexpect price hikes to continue moderating, but anticipate morenegotiating room on limits, terms and conditions as wella bigdifference from last fall. “While brokers and customers interviewed in thefall of 2003 generally expected little change in insurance coveragelimits and restrictive terms and conditions, those interviewed thisspring expect greater variance in coverage limits and restrictiveterms and conditions compared with that experienced previously,”the survey report noted.

“More so than the brokers and customers interviewed last fall, asubstantial percentage of those interviewed this past March expectcoverage limits for commercial property, excess liability,property-catastrophe, business interruption, directors andofficers, and employment practices insurance to go up,” TheResponse Center added. “For these same lines of insurance, higherpercentages of respondents expect terms and conditions to eitherremain the same or be less restrictive.”

Even though market conditions appear to be easing up at last,most risk managers are still moving aggressively to reduce theircost of risk, the survey found. Indeed, about eight of 10 said theyhave increased loss control and safety efforts to cut theirexposures, compared with 66 percent of thoseinterviewed in fall 2003.

“During the hard market, many more insureds increased theirretentionsoften substantially so they have much more skin in thegame,” said Zurich's Mr. Maguire. “Because of that, buyers are muchmore interested in managing loss costs, so they have a greaterfocus on risk engineering.”

Mr. Shine added that “were seeing a very healthy trend as aresult of the latest hard market, with buyers taking more ownershipand accountability for their cost of risk, which has a much higherprofile now that the price of coverage has risen over the pastthree years.”

With the hard market's moderation, the rush to the alternativemarkets appears to have slowed, the survey revealed. Indeed, thisspring, “significantly fewer [brokers] report that clientsincreased the amount they self-insure compared with thoseinterviewed in the fall 2003 survey (44 percent this year, comparedwith 59 percent last fall),” The Response Center noted. “Similarly,fewer report that any of their clients formed a captive83 percentversus 93 percent.

In addition, in the attitudes portion of the survey, 59 percentof buyers queried agreed that “we are comfortable withself-insuring more of our exposures, whether through higherdeductibles or self-insurance vehicles such as captives,” comparedwith 76 percent last fall.

Beyond the easing of pricing and coverage concerns, Mr. Thomasof Zurich said that “many buyers who might have looked into thealternative markets ran into the same issues primary carriersconfronted lower investment yields, the high cost of reinsuranceand that may have discouraged them from leaving the traditionalmarket.”

Quotebox: (awaiting mug)

“A lot of the post-9-11 capital is new and fragile. A majoreventman-made, like terrorism, or a natural catastrophecould stopthis moderating market in its tracks.
Greg Maguire
Executive V.P.
Zurich

Quotebox: (with Thomas mug)

“Another dynamic that may be contributing to the discrepancybetween brokers' and buyers' price predictions is that brokers dontwant to project a lower price than they are certain they candeliver.

Keith Thomas
Senior V.P.D&O Markets
Zurich

Captions For Graphics: (Place in this order)
For State Of Market Today Bar Graph (two graphs side byside–brokers, customers):

Flag: As The Market Turns
Head: P&C Pricing Pressure Easing
Both brokers and buyers indicate that market conditions continue toshift from a “very hard” market 12-to-18 months ago and havesoftened even more from a “somewhat hard” market in fall 2003.

For Legend above 13 individual market graphs, run with legenditself:
Head: About The Charts
The following charts are based on the responses of 208 brokers and208 corporate insurance buyers surveyed by The Response Center.Each graph shows the last renewal rate change experienced (listedabove “current”) and the anticipated change in the next renewal(listed as “future”) cited by brokers and buyers queried last falland this spring.

Flag: Commercial Property
Head: Buyers More Bullish
Sixty-two percent of brokers expect a rate hike in their nextrenewal (averaging 8 percent) while less than half of buyers expectan increase, 30 percent expect a rate cut, and the average gainbuyers anticipate is only 2 percent.

Flag: Property-Catastrophe
Head: Buyers Expect Big Drop
Even though it has been awhile since the market experienced amega-event, 60 percent of brokers still expect a price hikebut oneaveraging less than 10 percent. Customers are much more optimisticabout what lies ahead.

Flag: Workers' Compensation
Head: Comp Leveling Off
Both buyers and sellers are seeing a decline in the volatileworkers' comp market, although a lot depends on the industry andstate in which a company operates. Few from either group expectprice cuts here anytime soon.

Flag: Business Interruption
Head: Brokers, Buyers Differ
When it came to business interruption, brokersmany of whom dealwith middle-market clientshad a worse experience this spring inquoting business than the larger customers included in this survey.Seventy-one percent ofbrokers expect hikes ahead to average 9 percent, while riskmanagers anticipate little change.

Flag: Terrorism
Head: Despite Iraq, Rates Level Off
Both buyers and brokers expect rate increases for terrorismcoverage to drop into the low single digits. If Congress fails toextend its terrorism insurance program soon, however, rates couldsoar and capacity could dry up in a hurry.

Flag: Commercial Auto
Head: Brokers More Pessimistic
Seventy-three percent of brokers expect rates to rise, with theaverage at 9 percent, but only half of buyers see more hikescoming, while a little over one-third expect rates to stay thesame.

Flag: General Liability
Head: Market Keeps Moderating
The latest premium hikes in this line remained in the doubledigits, but looking ahead, both brokers and buyers expect moreprice moderation. One in five buyers anticipates a price cut.

Flag: Umbrella Excess Liability
Head: Rainy Days Continue
Half of the buyers and two-thirds of brokers surveyed expectpremium hikes in this line, although once again, buyers are farmore optimistic about the level of increases to come.

Flag: D&O
Head: Dramatic Improvement Seen
Major corporate buyers were hammered by D&O carriers last year,with rates nearly tripling. This year, buyers saw rates rise 21percent, but optimistically expect that to drop to a 6 percentraise. Brokers see double-digit increases ahead, and less than onein 10 expects a rate cut.

Flag: Employment Practices
Head: EPLI Rate Hikes Easing
As with D&O, buyers were hit hard last year, with an averageEPLI rate hike of 50 percent. Brokers, dealing in a broader-basedclientele, had more moderate experience, but this line was nopicnic for them, either. Looking ahead, rate hike expectationsappear to be leveling off.

Flag: Environmental Liability
Head: Pollution Premium Hikes Moderating
Both buyers and brokers expect relatively low single-digitincreases ahead for pollution-related risks. Two-thirds of buyersexpect rates to stay the same going forward.

Flag: Product Liability
Head: Buyers Expect Big Drop
Even though they reported an average increase this spring of 23percent, a steeper hike than last fall, only about half expectrates to keep rising, with the average gain at only 3 percent.

Flag: Medical Malpractice
Head: Is There A Doctor In The House?
Brokers surveyed had far worse experience and expectations thisyear than the very few corporate buyers surveyed who purchasedmedical malpractice coveragethree-quarters of which expect either arate cut or a renewal at the same price.

Stress Level Down Among Buyers, Brokers

Survey finds fewer having beefs with carriers overservice-related issues

By Sam Friedman

There's a lot less tension in the air among buyers, brokers andinsurers these days, and not just because prices, limits, terms andconditions all appear to be improving substantially for riskmanagers, the National Underwriter “State of the Market”survey found.

Indeed, whether it involves their comfort level with thefinancial security of insurers or their satisfaction with servicesreceived, corporate insurance buyers are a much more copasetic lotthis spring than last fall, when the remnants of the hard marketwere still creating stress for risk managers and their brokersalike.

The NU survey this March of 208 brokers and 208corporate insurance buyers who subscribe to NU, forexample, found much less concern over whether carriers will havethe money to pay claims down the road. Sixty percent of the brokerssurveyed agreed with the statement, “Our clients are comfortablewith the financial stability of their insurance carriers,” comparedwith just 38 percent last fall. Among buyers surveyed, 56 percentagreed, compared with 47 percent in the last survey.

The survey, sponsored by Zurich's North American CommercialBusiness division, based in Schaumburg, Ill., also found that withpricing pressures easing considerably, fewer risk managers andbrokers believe carriers “took advantage of buyers in the hardinsurance market.” Among buyers queried, 54 percent agree they weretaken advantage of, compared with 61 percent in the fall. Amongbrokers, 43 percent agreed this time around, down from 49 percentlast year.

Interestingly, in a new question asked this spring, 38 percentof brokers agreed that “when the market softens, our clients arelikely to change carriers to obtain lower prices,” while amongbuyers surveyed, only 22 percent agreed with that samestatement.

“There was a major upheaval in the property market following theterrorist attacks of 9/11, and we learned a lot about each other over thelast few years,” said Greg Maguire, executive vice president anddirector of the property group for Zurich's North American GlobalCorporate Business unit. “Buyers are more interested in trying todevelop some stability going forward.”

“Most buyers are tired of the cycle, tired of changing carriersand worrying about financial stability when shopping for insurers,”added Robert Shine, executive vice president of Zurich's NorthAmerican specialty division's excess casualty business. “Withinreason, they are not going to change carriers in a knee-jerkreaction over price. Many are looking for a long-termrelationship.”

In general, buyers appeared happy with their industry serviceproviders. On broker services, 86 percent said they were verysatisfied (compared with 79 percent last fall), while some 80percent felt the same about their claims and risk engineeringservicesclosely tracking the fall results.

One sore point in particular seems to have improved somewhatsince last fall's survey. This spring, 25 percent of buyers queriedagreed that “we receive our final insurance policies in a timelyfashion, error-free,” compared with only 8 percent last year. Amongbrokers, 34 percent agreed, against 14 percent in fall 2003. Whilethat still means that a vast majority of both segments believecarriers fail to hand over their final policies in a timely fashionwithout any mistakes, it's still a big improvement.

Among the buyers questioned by The Response Centeran independentresearch firm based in Fort Washington, Pa., that conducted thesurvey on behalf of NU and Zurichthere was a markedincrease in the number of those who would “prefer to have the samecarrier/carriers provide both international and domesticcoverage”48 percent compared with just 26 percent in the fall.Among brokers, 42 percent felt that their clients would want thesame carriers either here or abroad, compared with 28 percent lastyear.

With prices dropping, fewer buyers and brokers appear to want tolock in multiyear coverage. However, buyers still seem moreintrigued overall by the concept, with 71 percent of those surveyedthis year expressing interest (down from 75 percent last year)versus 42 percent of brokers (down from 53 percent).

Among buyers, there was a gain in the percentage interested in“integrated, total enterprise risk solutions”35 percent, up from 29percent last year. Brokers, on the other hand, are lessenthusiastic about the idea of linking multiple coverages in asingle program26 percent agreed their clients are interested insuch deals, down from 32 percent last fall.

Quotebox: with Shines mug

“Within reason, buyers are not going to change carriers in aknee-jerk reaction over price. Many are looking for a long-termrelationship.
Robert Shine
Executive V.P.Excess Casualty
Zurich

For Graphics:
For Alternative Market Table:
Flag: Pressure Eases

Headline: Fewer Buyers Seek Alternative Market
With insurance price hikes moderating, fewer buyers are looking tobail out of the traditional market, with captive activity lessintense. However, many more buyers boosted loss control and safetyefforts to cut their cost of risk.

Flag: Customer Attitudes
Head: Buyers Begin To Chill Out
More buyers feel comfortable with their insurer's financialsoundness, and three times as many are getting their policies in atimely way, without mistakes.

Flag: Broker Attitudes
Head: Price-Shopping Feared
Over one-third of brokers surveyed said clients would likely changecarriers to get better prices as the market softens. Interestingly,only 22 percent of buyers surveyed said they were likely to bailout on their current insurer over pricing concerns.

Market Heats Up, But No Meltdown Expected

Underwriters vow to hold the line on right price toassure continued profitability

By Sam Friedman

Now that commercial insurance coverage is available at lessonerous rates and often at more attractive terms and conditions,will underwriters remain as hard to please as Simon Cowellthebrutally honest and demanding judge of “American Idol” fame? Orwill they become pushovers, with price competition heating up tooquickly, prompting another market meltdown?

That's the key question raised in light of the market softeningindicated by risk managers and brokers responding to the latestNational Underwriter “State of the Market” survey,sponsored by Zurich's North American Commercial Business divisionin Schaumburg, Ill.

Over the past few months, in numerous public forums, topindustry officials have insisted that given the uncertainty of theinvestment markets, insurers will not be pricing aggressively formarketshare, but instead will focus on maintaining underwritingprofitability.

The survey indicated that brokers and their clients realize theyare not anywhere near a full-fledged soft market, and are not eagerto move their business purely on pricing considerations.

Indeed, among the 208 buyers surveyed, only 22 percent stronglyagreed that “when the market softens, we are likely to changecarriers to obtain lower prices.” Brokers responding to the samequestion were less sanguine about buyer loyalty, with 38 percentbelieving strongly that their clients will be “likely” to flipinsurers if it means getting a better price.

James Schiro, chief executive officer of Zurich FinancialServices Groupthe Switzerland-based parent of the NUsurvey's sponsorbelieves that buyers will stick with carriers thatproperly underwrite their risks, provide value-added service andoffer the financial security to pay claims.

“The expectation of more moderate price fluctuations, a uniformapplication of terms and conditions over the cycle, and thecapacity to meet your long-term needs are clearly goals for whichwe can all aim,” he said in his keynote address last month in SanDiego during the Risk and Insurance Management Society's annualconference.

“In this context, I believe buyers would be willing to pay the'right' or technically correct price for the exposures you wish tocover,” he added. “I also believe that working to moderate pricefluctuations in the insurance cycle is in the best interests of allof us, and will have a positive impact on everyone's bottomline.”

In a press conference at the RIMS meeting following his speech,Mr. Schiro said his belief that risk managers would be willing to accept“technically correct” prices in an increasingly competitive marketis “not wishful thinking.” He explained that by “educating” bothbrokers and risk managers about the long-term benefits of rationalpricing, sophisticated buyers would not move their business fromcarriers that offer financial security, excellent claims serviceand unique risk management solutions just to get a cheaperprice.

Although rates are trending downward and more capacity appearsto be available these days, leading risk managers are not ready todismiss hard market concerns going forward.

“I'm not sure we're seeing the 'right' price yet,” according toLance Ewing, who completed his term as RIMS president shortly afterthe group's annual conference. “We're not seeing reductionseverywhere,” he said during a press conference at the RIMS meeting,citing the oil and gas industries, as well as his own entertainmentsector, as examples. “Any area with a concentration of risk isstill hard put to get cheaper coverage.”

He also noted that “captive growth is still booming, there arelarger retentions being taken, and some people are simply walkingaway from buying certain lines, like terrorism, just because theywon't buy the coverage at those prices.”

Mr. Ewing, who is vice president of risk management at CaesarsEntertainment Inc. in Las Vegas, indicated there still might betrouble ahead for buyers. “Stability is truly in the eye of thebeholder,” he said. “We are still in a fragile insurance market.Imagine another terrorist attack, another major hurricane. I'mcautiously optimistic, but we're still walking on eggshells here.It's premature to say the market has been corrected.”

Officials from the Lloyd's of London market were equallycautious about declaring an end to insurance capacity and pricingconcerns. Worried about “complacency” after enjoying a banner year,Lloyd's market leaders vowed to keep a close eye on syndicates tomake sure they continue pricing business to produce an underwritingprofit in the face of a more competitive global market.

“We do need to keep in mind that, to a certain extent, we andthe entire insurance market were lucky in terms of disasterlosses,” said Julian James, director of worldwide markets atLloyd's, during a press gathering at the RIMS conference.

Noting that the U.S. primary insurance industry posted acombined ratio of 100.1 last year, while U.S. reinsurers came in at101.2, he pointed out that “our 90.7 ratio is where analysts sayyou must be to assure an adequate rate of return to investors. Yetclearly the industry as a whole is not there yet despite lowcatastrophe losses.”

Indeed, based on recent price firming, the industrys combinedratio should improve from last years 100.1 to 98.8 in 2004its bestbottom-line result since 1978, when it achieved a combined ratio of97.4according to Frank J. Coyne, chairman, president and CEO of theInsurance Services Office in Jersey City, N.J.

However, in remarks during the RIMS conference, Mr. Coyne notedthat with current investment results, tax rates and financialleverage, ISO calculates the industry would have to achieve acombined ratio of 94.3 to reach a 15 percent rate of returna resultachieved only once in the past 20 years, in 1986.

“The good news for insurers is that their rate of return for2003 was more than eight times their rate of return in 2002,” saidMr. Coyne. “The bad news is that their rate of return for 2003 wasjust 9.4 percentnot a lot of profit for assuming all the riskinherent in their business. Indeed, if anything is remarkable aboutthe state of insurance markets, its the signs that the next softmarket may be approaching, even though insurers rate of return wasjust 9.4 percent in 2003.”

Improving the industry's ROE will be difficult if ISO's premiumvolume prediction comes to pass. “ISO projects premium growth willdwindle to 4.7 percent from 9.8 percent last year,” Mr. Coyne said.Indeed, he added, with industry surplus having risen to a record$347 billion at year-end 2003, “is it any coincidence competitionis returning?”

Brokers are running scared as well.

“With softening market conditions returning to most lines,brokers expressed concern that it is only a matter of time beforeinsurers push aside the stricter underwriting standards of the lastfew years and start going after new business by premium-cutting,”said the Council of Insurance Agents & Brokers in Washington,D.C., analyzing its own quarterly membership survey results. “Ifthat happens, several [brokers] said, the financial stability ofcarriers moves back to the top of a list of concerns.”

“We fear that insurers may get back into stupid season,” said abroker from the Southwest surveyed by CIAB. “Softening pricing is arecipe for another awful cycle of insolvencies,” warned a secondbroker from the Pacific Northwest.

Still, Mr. James of Lloyd's insisted that savvy underwriterswill not return to the days of giving coverage away in return formarketshare. “The industry must maintain underwritingprofitability. That is the only sustainable, winning businessstrategy,” he said.

Lloyd's syndicates are “not going to increase their profits bytaking on more business that loses money,” added Lord Peter Levene,chairman of Lloyd's. “They just can't wave a magic wand and producemore profits simply by stamping their name on more risks no matterwhat the price. They have to continue to write business rationally.This is how we hope to assure continued profitability even duringdown markets and to avoid massive losses in any given year.”

The Lloyd's market has the advantage of having a Franchise Boardoversight system in place that can hold syndicates accountable ifthey begin underpricing business to boost premium volume at therisk of underwriting profits. The broader market has no such bodyto look over underwriters' shoulders. However, that doesn't meaninsurers will be racing to get marketshare at the expense ofprofitability?not with historically low interest rates, a volatilestock market, and the threat of terrorism and catastrophe losseslooming.

“We are not going to get into a marketshare game,” emphasizedMr. Schiro of Zurich during his RIMS press conference. “We areworking for an underwriting profit. That's what it takes to be atop-tier insurer, and it's the top-tier carriers that will bearound for buyers over the long haul.”

“If someone underprices us by 25 percent or more, the buyerreally has to consider the long-term costs of moving to such acarrier,” added Geoff Riddell, CEO of Zurich's global corporatebusiness, during the RIMS press conference. “Those who offer wildlycheaper prices and irresponsibly broader terms of coverage may notbe there to pay claims down the road.”

Nancy Chambers, a Canadian who took over as the new president ofRIMS this month, chose to look on the bright side during a pressconference at her group's annual meeting. Even if underwritersremain as hard to please as “American Idol” judge Simon Cowell,buyers should seize the chance to prove they have their exposuresunder control.

“This is an opportunity for risk managers to work with theirbrokers to truly market their programs to underwriters, who arestill looking carefully at all their risks,” said Ms. Chambers, whois risk manager at the Waterloo Region Municipalities InsurancePool in Kitchener, Ontario. “You need to raise their comfort levelto get the price that truly reflects your exposure.”

Table Captions:

Flag: Broker Expectations
Head: Is The Sky The Limit?
A large percentage of brokers expect available coverage limits togo up for several linesespecially commercial property andproperty-catastrophe. However, a higher percentage of brokers thanbuyers expect terms and conditions to become more restrictive incertain troubled lines, such as D&O and medicalmalpractice.

Flag: Customer Expectations
Head: Buyers Expect Status Quo
The majority of corporate customers are much less optimistic thantheir brokers about seeing a rise in available limits. However,buyers are less concerned than brokers about a tightening incoverage terms and conditions.

Quotebox for Schiro (with mug)

“I believe buyers would be willing to pay the 'right' ortechnically correct priceI also believe that working to moderateprice fluctuations in the insurance cycle is in the best interestsof all of us and will have a positive impact on everyone's bottomline.
James Schiro
CEO
Zurich Financial Services Group

Quotebox for Ewing: (with mug)

“I'm not sure we're seeing the 'right' price yet. We're notseeing reductions everywhereAny area with a concentration of riskis still hard put to get cheaper coverage.
Lance Ewing
Immediate Past President
RIMS

Lord Levene Quotebox: (with mug)

“Underwriters are not going to increase their profits by takingon more business that loses money. They just can't wave a magicwand and produce more profitsThey have to continue to writebusiness rationally.

Lord Peter Levene
Chairman
Lloyd's Of London

Reproduced from National Underwriter Edition, May 21, 2004.Copyright 2004 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.