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Bad Times for Brokers

David M. Katz CFO
Bad Times for Brokers - United States - US - agents - financial crisis - housing crisis


In a topsy-turvy financial world, commercial insurance premiums have kept on a steady downward course. The trend continued in the fourth quarter of 2009, with prices for liability coverage declining and property insurance holding steady, according to a new survey of 1,100 risk managers.



Workers' compensation and general liability insurance premiums dropped most sharply, with prices dipping by 5.5% and 5.0%, respectively, from the same period a year ago. Directors' and officers' liability prices dropped by 2.8%, while property insurance premiums fell by less than half a percentage point. The survey, which was conducted by research firm Advisen and the Risk and Insurance Management Society, calculated average changes in organizations' insurance costs as of the date they renewed their current policies.

Chances are that insurance markets will continue to soften through 2010, says David Bradford, executive vice president of Advisen. But what's good for buyers is bad for brokers: as insurance rates have fallen, so have commissions and fees. What's more, the global recession has cut into premium volume as companies downsize or go out of business.



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