At the beginning of 2009, following a period of generally declining property insurance premium rates, hospitality insureds saw rates remain virtually flat. But as the year progressed, insureds began to see rate increases averaging 3 percent for CAT-exposed risks and 2 percent for non-CAT exposed risks. Despite competitive pressures in the insurance marketplace, some carriers were reluctant to reduce pricing and some pushed for rate increases. It is unlikely that 2010 will bring any significant surprises in underwriting appetite or pricing from the major hospitality insurers.

Looking Ahead

Merger and acquisition activity is expected to continue in the hospitality and gaming sector in 2010. Transactions are often complicated and multifaceted, affecting economies of scale and forcing changes not only to existing policies, but also to policyholders, named insureds, and management companies. In the absence of a major catastrophe loss, hoteliers and restaurateurs should continue to enjoy favorable insurance premium pricing throughout the next year.