We are pleased to let you know that our Private Company Management Liability survey was posted recently at betterley.com. This Report reviews bundled products that can included D&O, EPLI, Fiduciary Liability, and other executive liability products. The target market is generally middle market and smaller insureds.
We have selected twenty-three carriers for this year’s Survey, up from twenty in 2010. Newly added carriers include Argo and Zurich; Starr is back after a one year absence.
2011 looks to be similar to 2010, but with a definite firming of rates indicated as the year develops. While we do not expect any significant increase in rates, discounts are disappearing, and small (5% or so) increases are more common.
The volume of business (gross written premium) is rising a bit, with most carriers reporting total premium growth in the 0-10% range; markets reporting flat or down premiums tend to be the smaller companies, as continuing softness in rates combined with cutbacks in coverage made for an environment in which a carrier was happy just to get as much premium as they did from the expiring policy. We see support, though, for premiums to resume their climb as insureds recover from the recession.
Based on confidential conversations, we found:
- Premium growth (2011 projected versus 2010) is rising slightly, accelerating as we get further into the year.
- Rates are flat or up 5 to 10 percent for good insureds, a bit more (10 to 20 percent?) for the less attractive insureds
- Deductibles are flat
- Reinsurance support is stable.
Although carriers continue to broaden the types of coverages they offer the middle market, we believe they are missing a golden opportunity by not offering more coverage options.
Adding more coverage options can be a successful product strategy because MLI policies are an easy sell to insureds and their brokers – most insureds need at least a couple of the core coverages (EPL and Fiduciary). Adding additional coverages to an existing policy is an easier buy (or sell?) for many insureds, who find it easier to add an option than to buy an entirely new policy.
Many insureds and brokers have told us over the years that they can get internal support for an added coverage option that would have encountered resistance as a new policy purchase. This was especially true during the recent soft market, when premium reductions freed up budget for additional insurance purchases.
More about lines of coverage soon (or, read the full Report at www.betterley.com).