Medical Malpractice Rates

The medical malpractice insurance marketplace is seeing premium reductions this year, according to an article in "The Standard," March 5, 2010. The piece quotes a Standard and Poor's report showing a slight reduction in premiums, compared to 2009 and 2008.

What Services Should Agents Offer Business Insurance Buyers?

On the Insurance Journal Forum I was asked, "What kinds of stuff makes an insurance consultant stand up and take notice???"

My List of Required Actions (Plus) for Agents Serving My Commercial Clients:

-Annual review meeting to review coverage (at insured's office, at agent's office, or on the phone).

-Presentation of renewal proposals 30 days prior to expiration - 60 days prior if the account is being renewed with the current insurer without other proposals. (This is a new requirement, that I know will cause gnashing of teeth. However, it is a standard that can be reached.)

-If the account is dynamic or complex, a mid year review - or more.

-Claims reviews as needed - discussing all open claims.

-Experience modification claim review (agent talks with adjuster) 5 months into the WC policy - all open claims going back 4 years.

-Review of experience modification worksheets when issued.

-Responsive to service requests.

-Utilizes email.

-Able to scan documents and attach them to emails.

-Responsive to coverage questions and alternative quotes.

-Broad access to markets - standard and E&S (through a broker is fine).

-A student of insurance coverage - advanced designations, access to FC&S, and other reference materials.

-A general attitude of, "how can we make it easy for you to do business with us."

I bring business to agents that meet the above. I appreciate agents who bring me ideas and insurance thinking. Emails sent to me that start, "I saw the attached and thought you might find it interesting." Company reports, agency white papers, copies of marketing materials, and other materials that help me serve my clients better. Don't buy me gifts, offer me lunch, send me sporting events tickets - all will be refused and returned.

Buyer's Market to Continue

The John Liner Letter published a report recently on the state of the insurance marketplace. It predicted that the soft (read "buyer's") market will continue for several more months and perhaps longer, "because insurers have too much supply chasing too little demand." The article cites unused capacity in the market. ("The Standard," March 5, 2010)

Five to ten percent premium reductions at renewal seem to be the norm. I am seeing higher reductions in the renewals I work on for clients.

Coverage terms continue to be liberal too.

Insurer Impairments - Insolvencies

The National Conference of Insurance Guaranty Funds recently issued a white paper on the status of the various state funds that "protect" insurance policyholders from insolvencies.

Naturally, the group reports that the group serves an important function. We'll leave that to another day...

The report reports that "insurer impairments" were up in 2009.

2009 20 impairments
2008 15 impairments
2007 14 impairments

(Source - 2/12/10 issue of The Standard)

Practical point - state guarantee funds do little for most business insurance buyers. Sure, if your insurance company becomes "impaired" the payment the guarantee fund makes is better than nothing. Most states limit coverage to $400,000 or $500,000 for claims. Return premium can be as low as $2,500. Your best bet? Don't buy insurance from a struggling insurer.

See your state's provisions - http://ncigf.org/GF-laws-and-summaries-by-state.

TheStreet.com Ratings

I have long been a fan of TheStreet.com Ratings - the rating service formerly known as Weiss.

I see them as the tough grader in the world of insurance company ratings.

AM Best is the easy grader. An incredible percentage of insurers have a Best rating of A- or better. That fact has always caused me to scratch my head. In everything else in the world groups populate a bell-curve. Not insurance companies (according to Best), most of them are Excellent or Superior.

The Street.com Ratings is a bit different. I count 167 out of 4300 insurers with a rating of A- or better - that's 4%.

Sure, I still use AM Best Ratings. Frankly, they are the brand everyone knows.

However, I always check the TheStreet.com Rating - http://www.thestreet.com/insurers/.

VT Work Comp Premium Reduction

Vermont is reducing its voluntary loss costs for workers' compensation by 4.1%.

The soft insurance market continues. Great news for insurance buyers.

The Endorsement All Contractors Need

Is there a chance your business can damage property owned by someone else?

Do you work at your customer's location?

If you burned down a customer's building, would you expect your insurance to pay for the damage?

If so, there is probably a hole in your insurance coverage.

Think about a painter. He sends his team into the customer's office one night to repaint a conference room. A careless worker lights up a cigarette and inadvertently starts a fire. In addition to the damage to the building and the general contents, the fire destroys the office computer server.

Most general liability policies will pay for the damage to the building and to the contents. The computer system is also covered.

What is probably not covered by the contractor's insurance is the data on the computer. Most general liability insurance policies specifically state that data is not "tangible property" and therefore not covered for "property damage" within the general liability insurance policy.

Surprise!

Fix the problem by having an endorsement added to your insurance policy that alters the definition of tangible property to include data (ISO form CG 04 37). You can also add coverage for "electronic data incidents" (ISO form CG 00 65).

If you don't have these endorsements now, it might be time to consider the quality of your insurance advisor.

Insurance Renewal Process White Paper Draft Review Copy Available

As I have mentioned here before, I have been doing a great deal of thinking on the subject of the business insurance renewal process - from the insurance buyer's perspective.

I have put some of my ideas in a white paper, including ideas shared by the well over 100 people who commented on my posts, here and from other sites.

I'm interested in feedback on the draft of the first section of my white paper.  I will provide a free draft to anyone interested.  Absolutely no obligation and your email address will not be shared.

Please go here to sign-up