Commercial property rates dropping; signs of flattening in liability

Commercial property rates fell 8.8% in the last quarter of 2003, marking the first major rate decline since 2000, according to the quarterly survey by the Risk and Insurance Management Society (RIMS) and Advisen Ltd.Risk managers report not only are property rates dropping, but, exclusive of inflationary increases, other lines are flattening or experiencing significantly lower increases since the third quarter 2003. Even troubled directors’ and officers’ (D&O) and excess liability lines are showing signs of future of relief in terms of policy count (the number of policies needed to cover a risk) and indication of growing supply. D&O rates grew 17% in the fourth quarter, compared to 75% in the third quarter. Excess liability rates grew by 12.4% in the fall of 2003, versus 60% over the summer. "There are still some anomalies, but actual purchase data from risk managers does not lie: price increases have either stabilized or retreated in most lines, and the next few months should make renewals and new placements a it less challenging than in the past few years," says Chris Mandel, RIMS vice president, chief risk officer and secretary.One trouble spot that remains is the fiduciary liability line, where increases held at about 65% throughout 2003.They survey represents buying data for 1,100 organizations in the U.S. and Canada. RIMS continues to urge Canadian commercial insurance buyers to participate in the survey so that Canadian data can be broken out from U.S. results. More information is available at http://rims.advisen.com/