Contractor Insurance

Ran across an excellent article by Advisen Ltd (https://www.advisen.com/) about the current pressures on General Liability and Workers Compensation due to the economy.
-- http://www.irmi.com/expert/articles/2009/advisen07-insurance-industry-market.aspx -

General liability and workers compensation policies both posted average decreases in renewal premiums. Directors and officers liability (D&O) policies renewed at higher premiums on average, but the increase was due to financial sector companies, a segment that has been bloodied by the subprime mortgage meltdown and credit crisis. Property policies renewed at essentially no change.
Workers compensation recorded a 2.8 percent average decrease in renewal premiums, as compared to a 1.7 percent drop in the second quarter of 2008, and general liability posted a 1.1 percent drop as compared to nearly a 5 percent decline a year ago. D&O increased 2.9 percent, a reversal of the 6.4 percent average decrease in the second quarter of 2008. However, excluding financial services companies, D&O policies renewed with a 4.1 percent average decrease. Property premiums fell less than 1 percent, which compares to a 6.1 percent drop in the second quarter of 2008.
Click here for Average Change in Renewal Premium: 2nd Quarter 2009 versus 2008.
Rates continue to drift downward despite the loss of $81 billion in policyholders’ surplus in 2008 and the first quarter of 2009, according to the Insurance Information Institute. Deteriorating investment markets was the principal cause of falling surplus. Policyholders’ surplus is a measure of insurance capacity, meaning that, as surplus falls, the "supply" of insurance also decreases.
"Insurance capacity is disappearing at a startling rate, but the market nonetheless remains competitive," says Dave Bradford, executive vice president of Advisen Ltd. and editor-in-chief of RIMS Benchmark Survey™. "As a result of the recession, the demand for insurance capacity also has decreased, which has kept pressure on rates. Companies are downsizing, which means that there is simply less to insure."
Falling demand has prolonged the soft market, but leading indicators tracked by Advisen Ltd.—most specifically the ratio of policyholders’ surplus to U.S. Gross Domestic Product, which measures the supply of insurance capacity relative to the demand for that capacity—suggest that the market is close to its bottom.
"If the gloom of the global recession has a silver lining for risk managers, it is the competitive insurance market," says Daniel H. Kugler, ARM, CEBS, CPCU, AIC, ACI, member of RIMS board of directors and assistant treasurer, risk management, at Snap-on, Inc. "The soft market appears to be winding down, but except for increases already taking place in some financial segments, there are no strong signals that rates will rebound sharply in the near future."