The first annual Insurance Industry Roundtable was held in Irvine, California recently. The topics of discussion included the need to gain proficiency in certain technologies, the economy, as well as the hard insurance market among other things. It was a daylong event and was attended by 23 professionals from the insurance industry. There were roundtable discussions regarding the present status of insurance industry and its future. It also included three presentations as well. A similar roundtable would be held every year by Rancho Cordova, a WIAA Education & Research Foundation, based in California.
After the meeting commenced, the question of the day was posed by Alan Smith, the president & CEO of WIAA. Smith stated that there was a lot of uncertainty in the present economy and the common refrain that is most commonly heard in the insurance industry is – where is the hard market?
Richard Kerr, Founder & CEO of Dallas, Texas-based insurance exchange MarketScout, made an attempt to answer the question. The commercial insurance prices have been tracked by MarketScout for a number of years and it has been estimated that the insurance industry has remained in the soft market for over six years. The turnaround is estimated to have taken place sometime in February 2005. That was essentially when things began ticking down and it was also the beginning of the soft market.
As per the data provided by MarketScout, 2007 seemed to be the best portion of this market and that continued in 2008 as well. Things began changing and by December 2009 it was beginning to get moderate. It was bumping around 3, 4, and 5% during 2010, stated Kerr while making references to the fluctuations in commercial insurance prices. Hence, things are beginning to settle down. Into 2011, 5, 4, 3, 2, 0 – and we are flat for September & October, he added.
Insurance companies have unique perceptions on the future of the market and what we are turning to. However, if rates are to be forecast, they are not likely to do down further.
The improvement in the market may not be experienced at the same time in every niche, stated Kerr. There are no micro economies today, he added. Kerr also placed a lot of emphasis on the need to keep a close watch on technology and urged insurance professionals to keep themselves updated on the cutting edge technologies that will enable agents and companies to move forward.
