NU Online News Service, April 26, 3:42 p.m.EDT

While underwriters have tried to hold the line on premiums,capacity is high and their resolve has shown some “cracks,” saysAdvisen's executive vice president.

The Risk and Insurance Management Society Benchmark Survey,administered by Advisen Ltd., found that three of the four lines ofbusiness tracked posted material decreases in average renewalpremium, as reported by risk managers.

Dave Bradford, Advisen's executive vice president, tells NUOnline News Service that because of the poor economy, risk managershave had to stay within budgetary parameters.

They have had to find ways to cut insurance coverage costs bypurchasing less coverage and/or taking higher retentions, “but thatjust increases the capacity,” he observes.

He adds that he was “actually surprised to see over the pastcouple of quarters how well rates were holding up, given theenormous amount of capacity in the market.”

“When talking to risk managers,” he says, “they confirmed thatinsurers were willing to hold the line on prices and walk away fromsome risks.”

However, he says, “I couldn't see that holding up indefinitely.We're seeing, at least for this quarter, some cracks in thatresolve.”

The survey found that commercial property insurance posted thelargest rate decrease, falling 4.2 percent on average for policiesrenewing during the quarter. The average workers' compensationpremium fell 3.2 percent, and the average directors and officerspremium dropped 2.3 percent.

General liability was the only line tracked by the survey to notrecord a material decrease, declining only 0.8 percent.

RIMS reported in February, on the 2010 fourth quarter, that D&O liability was the only linethat saw a material decrease compared to the prior year. D&Orates fell 4.6 percent, with large companies with revenue greaterthan $1 billion seeing greater declines, approaching 5.1 percent.Smaller companies saw declines around 2.4 percent, RIMS said.

It is still relatively early in the year with the Atlantichurricane season still ahead, “but barring a large catastrophe,2011 looks to be another year of competitive pricing,” FrederickSavage, RIMS board of directors, says in a statement. “Therecertainly is no shortage of capacity in most lines.”