INSURANCE MARKET UPDATE
The CIAB released its quarterly Market Index showing that premium prices for commercial business continued to rise in the third quarter. Responding brokers said that more than 60% of the mid-sized and large accounts experienced price increases from 20% to 50%; while half of their small accounts saw premiums rise 10% to 20%.
Ken Crerar, CIAB president, noted that the Index repeated familiar themes of higher rates, tougher terms and conditions and lower capacity, "but solvency concerns emerge as a troubling new twist. Large brokers are concerned state regulators and other solvency watchdogs do not confront solvency issues quickly enough to rehabilitate troubled carriers or get them out of the market."
Some comments from brokers:
* "We are seeing downgrades almost on a weekly basis."
* "We figure one (insolvency) is just around the corner."
* "Stock market and insolvencies will continue to hamper balance sheets. Should prolong the hard market."
* "[C]laim service is deteriorating; professional competence, staffing, response times, length of time to make payment are all declining; and clients are becoming mistrustful of insurers and suspicious of their intent."
HSB Offers Mold Protection Program
Hartford Steam Boiler is offering a new Mold Protection Program to help clients prevent and manage the risks associated with mold growth. The loss prevention and insurance program will focus initially on schools in Connecticut, New Jersey and Pennsylvania. The coverage is modeled after HSB's approach to equipment breakdown insurance coverage and will use a combination of inspections, loss prevention and insurance protection.
Lemac Has New Market for Residential Contractors
Lemac & Associates, Los Angeles, added a new market to write residential contractors engaged in the construction of tract homes. The nonadmitted market is rated A- X. It will start writing December 1. Minimum premiums are $100,000 for subcontractors and $150,000 for general contractors; minimum attachment level will be a $25,000 per-occurrence SIR. Policy limits are 1/2/2 with defense inside the limit. *