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 Management Society Inc. survey indicates directors and officers and fiduciary coverage remains expensive and scarce even as prices soften for property and excess casualty risks.

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

He noted that, "On the other side of the fence, with respect to property and excess from a casualty standpoint, it's beginning to moderate 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 always dated," he said at a press briefing. "It was at least six months old by the time it hit hard copy. Now people can go online and really see what is going on in the current marketplace."

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

Mr. Mandel told National Underwriter that the fact that data is so quickly available now, versus in the past when the survey was conducted on paper, means that RIMS can access the survey more often and may possibly follow trends on a quarterly basis. He said RIMS is still deciding how to use the data and how often 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 we compare with others like us, and to be able to do it on a contemporary basis."

He continued, "Management likes nothing less than to have data put 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 and conditions.

Retentions for the past two years have been rising as risk managers have sought to mitigate the impact of high rate increases and as insurers have attempted to reduce losses from property catastrophes, increased tort activity, and corporate governance scandals.

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

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

Participants can create charts and schedules of insurance programs and interactively compare their data with previous years' survey data. Participants also may use interactive benchmarking tools to compare costs and programs against continuously updated marketplace data, RIMS said.

Mr. Mandel will serve as RIMS president until May 1, when Lance Ewing, executive director of risk management for Park Place Entertainment Corp., will take over.

The society also announced that Nancy L. Chambers, risk manager for Waterloo Region Municipalities Insurance Pool and a member of the Ontario chapter, was elected first vice president, audit and investments.

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RIMS Survey: Some Sector Prices Fall

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