The report is Advisen’s RIMS Benchmark Survey for 2018. It says business insurance premiums are continuing to be soft. Only cyber insurance is seeing an increase you could call significant.
Advisen said in spite of record-breaking natural disasters and catastrophes, the average cost of risk (TCOR) fell 3% in 2017. It adds to three previous years to total four and dropped from $10.07 per $1,000 of revenue in 2016 to $9.75 per $1,000 of revenue last year.
Not good says Advisen.
The report said the drop is driven by falling property, liability, workers’ compensation, management liability and professional liability costs. And RIMS also notes that risk management administration costs are also a factor.
Advisen’s David Bradford said, “Market conditions are favorable for insurance buyers. A competitive insurance market resulting from a chronic overabundance of risk capital strongly contributed to TCOR decreasing steadily since 2013.”
Here’s more from the report on cyber insurance:
• For cyber insurance the cost per $1,000 of revenue jumped 33% in 2017
• The rise was 28-cents and is up from 21-cents in 2016
• The average premium per employee rose 9%
• Over the last six-years the number of companies purchasing cyber insurance is up from 35% in 2011 to 65% in 2017
Banking, education and healthcare are the industries purchasing the most cyber insurance.
Meanwhile, a separate report from Fitch Ratings said for the fourth year in a row underwriting losses for personal lines has gone up. The first three years had losses being caused by personal auto. Ironically — said Fitch Managing Director James Auden — losses for personal auto continue but the losses in personal lines are now being led by homeowners.
“The homeowners line is traditionally a more volatile product segment, which experienced a higher combined ratio than personal auto for the first time since 2012,” he said.
The combined ratio for 2017 for personal lines hit 103.8. Oddly that’s as premiums continued to grow. Higher catastrophe losses are to blame.
Here’s other info contained in the Fitch report:
• Personal auto still had huge underwriting losses in 2017 but price increases at renewal improved things
• Personal auto’s combined ratio fell to 102.6 in 2017 — down almost 4 points
• Homeowners combined ratio rose to 107 in 2017
• From 2013 to 2016 the average was 92
• Personal auto has grown the fastest the last two-years at more than 7% in net-written premium growth
• Homeowners fell during the last three-years and hit only 2% net-written premium growth
Source link: Insurance Business America, MyNewMarkets.com