Workers' comp reinsurance rates renewing 'as-is' or remaining within narrow window
By CYRIL TUOHY, managing editor of Risk & Insurance®
Who would have thought there'd be a bright spot in the January 2009 renewal season, a season which is seeing some property reinsurance rates rise by an average of 11 percent, some as high as 25 percent?
Workers' comp, of course. That line's been soft for the past two years at least and looks to remain flat in the first part of 2009, according to a report by the reinsurance broker Guy Carpenter & Co.
Workers' comp pricing in the catastrophe layers ranged from a 10 percent decline to flat, according to the Guy Carpenter report.
A separate report issued by Willis Re noted that several reinsurers had come in with rate increases.
"The market is divided, however, and many programs renewed 'as is' or with modest decreases," the Willis Re report stated.
Rates for the working layers are falling between a 5 percent decline and a 5 percent increase, based on loss experience, the Guy Carpenter report noted.
"Terms and conditions tended to be stable, though some insurers with California exposures purchased increased limits," wrote Sean Mooney, chief economist with Guy Carpenter and author of the report.
The Willis report found that many companies were buying down retentions and that programs were renewing "as is" with modest increases.
With the nation entering into its second year of recession and having shed millions of jobs, the report also noted that shrinking payrolls and related premiums would continue to decline in 2009.
January 8, 2009
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