Nearly all risk managers (96 percent) have significant concerns about the availability and pricing of coverage, according to a survey of member firms of The Independents—an international coalition of insurance brokers and risk-management-services firms.
The global survey also found that brokers believe their risk manager and buyer clients are concerned about managing risk with fewer resources and reduced budgets; particularly worried are those firms with large natural-hazard and supply-chain exposures.
John Eltham, head of North American business for Miller Insurance and founder of The Independents, tells NU: "Buyers have gotten much more in touch with their business. Risk managers now want more tailored insurance programs that reflect their specific exposures, their specific risks."
As they renew their insurance programs, risk managers and other insurance buyers generally are finding a more challenging environment for transferring risks associated with facilities located in areas prone to natural catastrophes, such as earthquakes, windstorms, floods and tsunamis, says Eltham.
He adds that underwriters also have had a wake-up call, "because Thailand was considered a non-cat area and therefore the amount of modeling and monitoring of aggregation leaves a little to be desired."
For some underwriters, he says, it has been a surprise "just how much exposure they have. So 
[buyers and underwriters] are looking at the same situation—buyers saying they might want to buy more [coverage], and underwriters saying they might want to cut back on this."
He observes that while the record level of natural-catastrophe losses in 2011 hasn't resulted in dramatic pricing increases, "it has generally led to a firmer stance from insurance underwriters, including upward pressure on premium pricing and some restrictions on capacity for facilities or key suppliers with exposure to natural hazards such as floods."
The survey also showed that as clients renew programs, 28 percent are facing property-insurance rate increases of 5 percent or more, and 24 percent (in particular, those with natural-hazard exposures) are seeing increases of 6-10 percent and higher.
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