Insurance market update

Insurance market update

Premium growth rate forecasts for 1995 range from 3% to 5%

Wall Street analysts contacted by the Insurance Information Institute (III) are expecting property-casualty premiums to grow by 5.1% this year. The III’s own growth forecast is in the 3% to 4% range.

The III points out that in auto and workers compensation, which together account for close to 60% of industry premiums, results for 1994 were strong, with estimated combined ratios of 102.9 and 99 respectively. “Companies are not likely to be under cost pressure to raise rates significantly in these lines,” said Sean Moody, senior vice president and economist for III.

He noted that homeowners rates will continue to feel upward pressure but that homeowners only accounts for 9% of total premiums.

The Wall Street analysts predicted little change in the profitability of the P-C industry this year, forecasting a combined ratio of 109.1. Last year’s combined ratio was 109.6.

CNA offers travel help with group accident coverages

Employees covered under CNA’s group accident coverages are being offered help in coordinating travel arrangements when they become ill or suffer an accident during travel. The Travel Assistance Services (TAS) program provides 24-hour, 365-day-a-year help in locating appropriate medical care and arranging necessary travel for the employee and his or her family.

The program, offered in conjunction with Worldwide Assistance Services, a member of Europ Assistance Group, provides local referrals for doctors, hospitals and dentists in many areas in the U.S. and abroad. TAS will even make the actual appointments for treatment and arrange for payments of up to $5,000 directly to on-site medical providers. If the employee needs to be transferred to a different medical facility, TAS will make the arrangements through its own attending physicians and the local attending physicians.

Family members and friends of the injured or ill employee are kept up to date with medical monitoring from TAS. The TAS staff is multilingual and can communicate an employee’s condition with local attending medical personnel and with the patient’s family. If any dependent children were traveling with the injured or ill employee, TAS would make arrangements for a return to home with a qualified escort when necessary.

In the event an employee dies while traveling, TAS will make plans for transporting the remains.

Other services offered through TAS include: replacement eyeglasses and medication; emergency travel arrangements; emergency cash; location of lost luggage, documents and personal items; legal assistance and bail; and pre-trip assistance.

Trash haulers program reduces minimum premium

The Custom Underwriting Facility of Reliance Insurance Company has reduced the minimum account premium for its trash haulers program to $15,000 in most states. The program, written through Go Pro Underwriting Managers of San Antonio, Texas, provides property-casualty coverages for nonhazardous refuse and recyclable material haulers in 49 states.

The reduced minimum premium will be available in all states except California, Florida, Hawaii and Louisiana. The program also will guarantee to renew trash haulers in the $15,000 to $24,999 premium range which continue to meet Reliance’s underwriting guidelines.

For more information about the program contact Bill Graves at Go Pro: 800-367-7777.

General Accident introduces motor truck cargo program

General Accident Insurance Company has added a motor truck cargo program to its commercial inland marine product line. Aside from the standard cargo liability coverages the program offers coverage for loading and unloading, pollutant clean up and removal, moving equipment up to $2,500 and earned freight.

Insureds can customize their policy by adding endorsements and other provisions such as mechanical breakdown of refrigeration or heating equipment; permission to carry excess insurance; and multiple reporting options.

Travelers doubles limits for commercial umbrella

Travelers Insurance increased the limits for its stand-alone commercial umbrella liability policy to $20 million. The coverage is targeted at medium-sized businesses with up to $500 million in sales, particularly manufacturers.

The minimum premium is $12,500. Minimum attachment points are $1 million per occurrence/$2 million aggregate for general liability, $1 million for auto liability and $1 million for employer’s liability.

“Umbrella liability is a critical coverage that can protect a business and eliminate policy gaps,” said Richard Barbieri, senior vice president, Specialty Insurance Division of Travelers Insurance. “With everything that is going on in the court and tort systems, it’s a coverage that businesses should not be without.”

Mike Stone, vice president of Travelers Liability Division, Commercial Lines Claims, noted a recent claim that was resolved for $10 million involving a brain injury to a contractor’s employee who suffered a fall at the premises of a manufacturing client. The entire claim was covered.

The stand-alone umbrella liability policy is available to both Travelers and non-Travelers agents through the company’s appointed wholesale brokers. For more information or a list of appointed wholesale brokers, contact: (in Hartford) Rebecca Brown (203) 277-4691; Scott Golder (208) 954-1587; Dave Hilton (203) 277-3046; or John Caligaris (203) 277-9753; in Chicago, contact Linda Kantor (312) 609-2943; or Peter Komblum (312) 750-2887.

Travelers’ stand-alone umbrella liability coverage is available in all 50 states.

Accountants liability program to be transferred to Zurich

As part of Zurich American Insurance Company’s assumption of The Home Insurance Company’s business, Zurich will maintain the accountants professional liability program managed by Herbert L. Jamison & Co. “The eventual transfer of the program from Home to Zurich will begin to take place just as soon as regulatory approval of the proposed acquisition is completed,” said John O. McDonald, a Jamison partner.

D&O liability package developed for community banks

Executive Risk Management Associates, D&O underwriting manager for The Aetna Casualty and Surety Co. and the Executive Risk Inc. companies, has developed BankPack, a D&O liability package designed for the needs of community banks with less than $250 million in assets.

The new policy responds to the concern of directors and officers of smaller community banks over the wave of bank consolidations sweeping the country today. There is a much greater chance that the bank may be approached by a prospective purchaser or sold. This increases the chance of resistance to the merger on the part of depositors or for shareholders to take legal action against directors and officers.

The policy, based on a study of the current legal and regulatory issues of the industry, provides coverage in many key areas that other policies exclude.

Coverage, built around ERMA’s existing D&O policy, also offers a broad employment practices liability endorsement as well as enhanced regulatory coverage. Additional coverage options such as fiduciary, IRA/Keogh and trust department errors and omissions are available through one combined application.

The broad employment practices liability coverage includes protection for the bank itself in employment-related matters, the elimination of the “insured person v. insured person” exclusion, as well as the “mental anguish and emotional distress” exclusion.

The regulatory coverage eliminates the regulatory exclusion and adds coverage for administrative hearings, as well as an option for coverage for a civil money penalty itself.

For further information, contact Deborah Urbano, underwriting manager of the community banks unit, Executive Risk Management Associates, 82 Hopmeadow St., Simsbury, CT 06070-7683; (203) 280-0496.

New miscellaneous professional liability program offered

American Special Risk Insurance Services (ASR) is offering a new professional liability insurance program featuring limits ranging from $100,000 to $1 million. The program is available nationally on both an individual and association basis. The minimum premium is $1,000.

Insurance is available for a wide range of classes that do not fit into defined groups or sponsored programs. The insurance carrier is Zurich International Re. (UK), a member of the Zurich Insurance Group.

For further information, contact Harris Rutsky, American Special Risk Insurance Services, 14328 Victory Blvd., Ste. 209, Van Nuys, CA 91401; (818) 785-7711; WATS 800-350-4477; Fax: 818-376-8514.

Copyright Rough Notes Co., Inc. Apr 1995

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