While the hard market has arrived for D&O insurance, the rest of the US commercial insurance market has seen little or no change in rates in the first quarter.

The latest Risk & Insurance Management Society (RIMS) benchmark survey shows business premiums were flat or only modestly down. Meanwhile banks and financial institutions bought D&O insurance at substantially higher rates.
 
RIMS Board member Daniel Kugler says the US insurance market is still very competitive, and while some insurers are predicting an imminent hard market there are few signs that rates will rise sharply in the near future.
 
The survey shows renewed general liability premiums in the US fell 3.8% in the first quarter, workers’ compensation fell 2.5%, and property renewal was flat. D&O premiums increased 3%, driven entirely by financial companies.

Benchmark survey editor Dave Bradford says even though the economic crisis has had a negative impact on insurers’ top and bottom lines, so far D&O is the only segment to respond with higher premiums.

“Insurers struggle against falling rates, increased losses in some lines, and sharply lower investment income due to the credit crisis, but the commercial insurance industry is still over-capitalised,” he said.