There was much talk of a hard insurance market at the beginning of 2009, and rates saw modest increases during the first half of the year. By midyear, however, the trend began to reverse and rates fell to where they were before the rise earlier in the year. In the third quarter, it became clear that the discussion with underwriters had turned from concern about exposures to concern with making budget. By year’s end, rates showed modest to significant decreases. 

Looking Ahead

As insurers compete for business and strive to hold premiums, significant downward pressure on premium likely will develop. Nonetheless, we expect continued reluctance to lower deductibles or broaden coverage.