Across the board, surplus lines carriers and distributors have seen pricing resistance. There are exceptions.
&#x201C;The situation specifi cally in trucks again is you used to have professional carriers who spent 100% of their time dedicated to trucking. When the economic downturn comes and you start to see that kind of pain, obviously their books start to diminish. Those with diversifi cation can weather the storm and come back into it. Other folks who weren&#x2019;t diversifi ed really lost some top line.&#x201D; Steven DeCarlo, AmWINS
Regardless of line of business, insureds and producers should not expect price increases or tighter terms, panelists said. The primary driver remains the sluggish overall economy. Until business and consumer economic activity returns to more-active levels, related commercial risks are likely to remain at restrained levels.
One indicator of commercial activity is transportation coverage, including truck and rail. Neal Abernathy notes that trucking fi rms in recent years did not follow historical patterns of downscaling. Instead, their business activity moved from normal levels to near- complete inactivity. &#x201C;We skipped a step in there because they didn&#x2019;t cut out maintenance,&#x201D; Abernathy said. &#x201C;They just went out of business.&#x201D; One positive result of the slowdown in trucking and transportation is that fewer units on the road has helped reduce loss trends.
Other lines expected to remain weak include coverage for coastal property, with reductions averaging 5% to 10%, panelists said.
Following the spate of bank failures in 2008 and 2009, coverage for fi nancial institutions became more diffi cult to obtain, particularly
for those involved in troubled banks or fi nancial organizations, but has returned to softer pricing and less-onerous terms for most organizations.
One bright sector remains programs insurance business, Power said. In a program, a brokerage works closely with a carrier to provide customized coverage to narrowly defi ned sectors.
Copyright &#xA9; 2010 by A.M. Best Company, Inc. All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.
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