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29 November 2012

CRE: Regulation, compliance and network security will drive management liability costs


Management-liability and professional-lines insurance buyers should prepare for rate increases in 2013, sparked by rising concern over the expanded scope of regulation, escalating costs of compliance, and new risks from privacy violations and breaches of network security, according to insurer Torus.

Jeffrey Grange, Senior Vice President, Head of Professional Lines at Torus, said that the results of its second annual Management Liability and Professional Lines survey carried out among US risk managers, insurers and brokers had shown a marketplace that is 'firming' across many customer segments and product lines. "Poor loss experience in major classes coupled with increased exposures is driving rate increases. 2013 will be a challenging environment where coverage, limits and pricing are all on the table and actively re-negotiated at renewal. Underwriters must be prepared to maintain an open dialogue with producers and their clients, listening and working constructively to successfully navigate this complex and continually shifting risk environment", commented Mr Grange.

The survey of 105 insurance professionals was conducted by Torus at the 2012 Professional Liability Underwriting Society (PLUS) International Conference in Chicago in early November. The survey included responses from brokers, agents, insurers and risk managers.

Torus said that when asked which piece of legislation will have the greatest impact on the management liability and professional lines market over the next 12 to 18 months, nearly half (49 per cent) of respondents identified the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) as the key legislation to watch.

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