PD/BI Insurance Survey and Market Outlook
One of the important requirements of AIRMIC members is access to more and better benchmarking data. In response to this requirement, AIRMIC commissioned Advisen to undertake research with the membership into Property Damage / Business Interruption (PD/BI) insurance. The research and the publication of this benchmarking report have been sponsored by Willis, the global insurance broker.
The initial survey has yielded some interesting data. However, to make this benchmarking report even more valuable for members, AIRMIC will conduct the survey annually. It is hoped and anticipated that AIRMIC members will provide more and richer data such as rates, key cover and service issues each time the survey is conducted.
AIRMIC will also welcome feedback about the benchmarking statistics that are most useful, so that this benchmarking report delivers real benefit to the AIRMIC membership. The individual data sets collected are treated confidentially.
The key findings of the first survey are:
- more than two thirds of respondents purchase limits of £100 million or more PD/BI insurance cover;
- more than 50% of survey participants pay more than £1 million per year for PD/BI insurance coverage;
- companies that pay higher premiums are more likely to make use of engineering consultants; and
- captive insurance companies remain an important risk financing tool for this class of insurance
With the hard market of 2001/2002 now becoming a distant memory for many who work in the insurance industry, the property damage and business interruption (PD/BI) market faces a number of intriguing questions:
- will the soft market continue throughout 2010 and what type of event might it take to drive rates up?
- can the market respond to the changing risks presented by changes in technology, such as “cloud” computing?
- with the often made claim that extreme weather events are becoming more severe and frequent, will insurers actually impose new climate related limitations?
