Business Insurance

After workers compensation insurers experienced another tough year during 2011, guaranteed cost and monoline programs “will likely be more difficult to place,” states a recent market quarterly report from Marsh USA.

“Some carriers are unwilling to compete on a monoline basis, or are requiring supporting business,” states Marsh's Global Insurance Market Quarterly Briefing: Q1 2012.

Comp Time believes the trend of large insurers turning down monoline business started last year.

Marsh's report discusses a broad range of coverages, not just workers comp insurance.

Also, in a recent Marsh webcast a Marsh broker points out that workers comp insurers are looking for price increases across their entire portfolios with guaranteed cost buyers feeling the price hikes the most.

That is usually how it goes for guaranteed cost buyers when the market begins firming.

But all employers are feeling the sting of medical inflation and increased workers comp frequency.

Here's my take: Most employers are on a Guaranteed cost program. The rate increases from loss cost filings, assesments, and the new 2013 mod split point are going to drive premiums way up and schedule credits are not going to win renewal business. I know all this because I just spoke to some middle market brokers about their APRIL renewals and their comment was "rough times" and we are still in 2012, not 2013. Brokers will have to get their clients' loss experience into marketable shape if they want carriers to quote the business. Brokers are going to have to show their clients "why they're different" or they are going to lose a big piece of their book quickly. Everybody agrees the market is changing, there are only three questions 1) how quick 2) how severe 3) who will turn this hardening market into a broker opportunity!