nav-submenu-arrow

 

2011 Insurance Industry News & Notes

Todd Heitshusen, Power Group RiskBy:  Todd Heitshusen – Power Group Companies – January 2011

It is no secret that 2010 was another year of the soft market for the Property & Casualty Insurance Industry.  As 2010 was coming to a close, a significant number of Insurance Carriers continued to aggressively pursue new business growth.  Turning the page to 2011, there are no signs of a hard insurance marketplace in the near future.  Insurance carriers continue to report profits, and their capacity for growth remains present.  In fact, some have even gone as far to mention that a soft market is the new norm and pending a major global disaster, it is here to stay.

News & Notes:

  • No major regulatory or legal actions impacted the Property & Casualty Industry in 2010.  All indications received by the Power Group suggest none will impact 2011.
  • Insurance carriers will remain profitable if we assume a normal rate of catastrophic losses will occur in 2011.
  • Power Group research concludes that the Insurance Market can expect overall rates to decline 0 to 5% in 2011.  Property & Casualty average commercial rate increases have remained below 0% (below flat) since April of 2005 (68 consecutive months of rate decreases).  The greatest rate declines are reflected in the following lines of coverage:
    • General Liability
    • Commercial Property
    • Inland Marine
    • Commercial Automobile
  • Workers’ Compensation pricing is expected to flatten in 2011.  Rate increases are being applied in California and Florida, which are two of the largest workers’ compensation markets in the United States.  However, other states will continue to apply decreased rates and Lost Cost Multipliers.
  • Workers’ Compensation claims frequency across the United States is in a decline.  Claim frequency typically declines during weak economic periods.  On the other hand, claim frequency typically increases during strong economic periods.  This historic trend will be closely monitored as we watch the economic recovery, and optimistically anticipate rate increases if we see an increase in claim frequency throughout 2011.
  • Excess & Surplus lines insurers continue to lose market share as the soft insurance market forces aggressive underwriting within the standard market insurers.

We will continue to see a competitive landscape in 2011 as insurance carriers compete for new business.  Look for both insurance carriers and brokers to offer value services in order to set them apart, and drive savings towards a company’s total cost of insurance.

GINA II REGS TAKE AFFECT

On November 9, 2010, the Equal Employment Opportunity Commission (EEOC) issued a final rule to implement Title II of the Genetic Information Nondiscrimination Act of 2008 (GINA). Title II is designed to protect job applicants, current and former employees, labor union members, apprentices and trainees from discrimination based on their genetic information. The final rule is effective on January 10, 2011. (Read Gina II article.)