WC still a trouble spot for agents and brokers

Risk & Insurance, Oct 1, 2003 by Nancy Grover

While there's generally good news about the property-and-casualty marketplace, the same can't be said for workers' compensation. The latest survey of agents and brokers shows increasing problems with the availability of coverage, especially in California, Florida, Texas and New York.

The concerns were reflected in the latest quarterly survey by the Council of Insurance Agents and Brokers. Besides workers' comp, insurance for medical malpractice and liability areas such as directors' and officers' coverage were seen as the biggest trouble spots. "Carriers are still picking and choosing what they will write very carefully in these lines," says Ken Crerar, CIAB president.

Carrier insolvencies were cited as one of the primary concerns of respondents, with 71 percent saying that was a bigger problem in the second quarter of the year than six months ago. Rating downgrades of insurers and adequacy of reserves for areas such as mold, asbestos and other environmental claims were cited as areas that will likely affect the availability and affordability of commercial insurance.

The 125 brokers reported that 70 percent of their workers' comp accounts were experiencing rate increases of as much as 30 percent in the second quarter. Asked how much the rates have changed during the second quarter, the brokers responded as follows:

* 2 percent reported declining rates of as much as 10 percent.

* 11 percent reported no change.

* 27 percent reported increases of up to 10 percent.

* 28 percent said rates were up 10 percent to 20 percent.

* 15 percent reported increases of 21 percent to 30 percent.

* 3 percent said increases were up 31 percent to 50 percent.

* 2 percent reported rate hikes of more than 100 percent.