After showing signs of hardening in late 2008—which did not materialize—the U.S. commercial property insurance market for life sciences companies was in transition in 2009. Products liability insurance rates for life sciences firms have continued to trend downward, although there has been some firming of rates in the London markets on the higher attachment points. Insurers are continuing to closely review products imported from Asian countries, due to recent adverse publicity related to certain products. Underwriters’ willingness to provide broadened coverage for perishable goods in transit and storage, control of damaged goods determination, and regulatory rejection is being coupled with aggressive rate reductions, especially when renewals are marketed.

Looking Ahead

Higher products liability insurance premium rates are not likely in 2010 in preferred classes of business. The aggressiveness of new insurers into the clinical trials market likely will continue to create opportunity for improved pricing for clinical trials where accounts have not been marketed in the recent past. The near absence of catastrophe losses in 2009 and the desire by several key insurers to grow premium market share will ensure that pressure on rates will continue into the first and possibly the second quarters of 2010.