That was the conclusion of the RIMS Benchmark Survey, an industry survey of commercial insurance market conditions with analysis from Advisen Ltd. for the Risk and Insurance Management Society (RIMS), according to a press release.
“The increase in fiduciary liability costs is startling, even in this hard market,” said Christopher Mandel, RIMS vice president, chief risk officer and secretary, in a statement. “With the spate of lawsuits against these trustees, the resulting effect on insurance prices is understandable, but this increase is dramatic. However, the slight increase in policy counts may be a light at the end of the tunnel for risk managers.”
Advisen CEO Thomas Ruggieri said that insurers are trying to cope with the risk of pension fund lawsuits against funds “whose portfolio values have been ravaged by underfunding, questionable loans to sponsor organizations, corporate scandal, bankruptcy and an anemic economy.” He said insurers fear a tidal wave of litigation.”
Directors and officers (D&O) liability insurance also continue to rise, with premiums up over 200% against last year. The survey data shows that D&O premiums continue to show extraordinary increases for the third straight year.
But the “number of policy” counts, which reflects the number of policies required to complete a desired level of insurance coverage, rose only slightly. That small increase suggests that even though the costs of these policies are increasing, the supply may be catching up to demand, creating greater equilibrium in the market compared to previous quarters, according to the news release.
For more information, go to http://rims.advisen.com/ .