More fidelity/crime insurance accounts are seeing rate increases as 2012 progresses, and overall, this segment of the market is described by insurance-broker Marsh as “relatively stable” in terms of both rate and available capacity. 

“In general, insurers are now seeking premium increases, especially where there have been measurable increases in exposures,” says Marsh in its Benchmarking Trends report, titled, “Fidelity/Crime Insurance Rates Rise in Third Quarter.”

Marsh says the percentage of accounts experiencing rate hikes at renewal increased from 28 percent in 2012’s first quarter to 46 percent in the third quarter. Overall, in the third quarter, rates increased an average of 3.3 percent, Marsh says. However, the broker notes that many clients can still achieve flat renewals, and clients with favorable risk profiles could still see premium savings “through aggressive marketing and/or restructuring of programs.” 

The report states, “Insurers continue to focus on risk selection, making risk differentiation the key to renewals. Given the consistent profitability to insurers of the fidelity/crime product line, we expect it will continue to attract modest amounts of new capacity, which will pressure traditional carriers to temper efforts to increase premiums.”

Marsh says financial institutions have been the largest purchasers of crime/fidelity limits over the last 12 months -- from the beginning of 2011’s first quarter to the end of 2012’s third quarter -- averaging about $21 million in limits overall. Firms with more than 4,000 employees purchased an average of $55 million.

Health care companies were the second-largest purchasers, averaging limits of $5.5 million. Manufacturing organizations purchased an average of $5 million in limits.

The chart on this page was corrected.  The previous version incorrectly inverted the increase/decrease colors.