Construction firms, architects, and engineers are starting to see rising insurance prices in specific sectors, according to the latest Lockton Market Update. Lockton, the world's largest privately held insurance broker, has just published new insights on the commercial insurance market for construction firms and architects and engineers. Said Lockton experts Jamie Knoop, Paul Primavera and Jody Wright in the construction report, "The market is clearly firming in chosen segments and geographies, and while most would hesitate to predict a 'hard' market, pricing is under pressure." The report adds, "Accounts with good loss histories are still able to take advantage of a very competitive insurance market."
Worker's compensation markets in construction, especially in California, are more challenged with the California Insurance Commissioner approving an average rate increase of more than 35 percent. These are "advisory" rates from the WCIRB and the final rates are determined by insurers based on their loss and underwriting experience. "For 2012, we expect the construction insurance market to be in transition toward increased rates. However, until the market experiences sustained underwriting losses, material decline in surplus and capacity, and a tightening in the reinsurance market, the market will continue to be stable and available for consumers," the report explains.
In professional liability for architects and engineers, the largest firms are seeing the most pricing pressure, says Lockton's Thomas Miller. "Overall rates in the professional liability sector have begun to strongly trend upward outside of the small- and mid-size sector, and accounts with significant claims are seeing sizeable increases in rate."
Miller adds that project-specific coverage is particularly challenging. "Project-specific professional liability for architects and engineers remains a product that continues to experience very restrictive terms and conditions along with very strong pricing from the carrier's perspective."
The Lockton Market Update is available free. The newest update includes reports on 20 insurance and employee benefits markets globally.