Table of Contents
- Scope and Themes
- What you need to know
- Scope of the report
- Abbreviations and terms
- Abbreviations
- Terms
- Executive Summary
- Industry snapshot
- Two markets: areas with major catastrophic exposure and those without
- Preparing for potential catastrophes
- Federal legislation under consideration
- Tort environment is changing
- Market concentration and market-share leaders vary by commercial product
line
- Proprietary survey findings reveal attitudes of commercial agents
- Commercial share of agent business
- Companies represented
- Agent longevity
- Factors influencing choice of commercial carriers
- Securing coverage for businesses in disaster prone areas
- Technological and marketplace developments benefit commercial agents
- Market Drivers and Future Trends
- Currently a highly competitive, soft market
- Figure 1: Average commercial rate change, all lines, Q1 2004-Q4 2006
- Figure 2: Commercial accounts rate changes, Q2 2006 and Q4 2006
- Figure 3: Rate changes for commercial insurance by size of accounts, Q1
2005-Q3 2006
- Figure 4: Percentage of commercial accounts renewing with positive rate
changes, Q2 2006 and Q4 2006
- Figure 5: Anticipated price increases projected during 2007, by market
sector
- Excess and surplus also impacted
- Soft market-but profitable
- Figure 6: Property/casualty net income after taxes, 1991-2006
- Combined ratios improving
- Figure 7: Property and casualty industry combined ratio, 2001-08
- Figure 8: Commercial lines property and casualty combined ratio vs total
property and casualty, 2001-06
- Figure 9: Combined ratios of property and casualty by commercial product
line, 2005 and 10 year average
- Investment income' s contribution to profitability
- Predictive analytics improving underwriting
- Two markets: areas with major catastrophic exposure and those without
- Figure 10: Total value of insured commercial coastal exposure, 2004
- Global warming and macro outlook for hurricanes
- Annual experience differs by types of catastrophes that predominate
- Figure 11: Catastrophic losses, 1996-2006
- Figure 12: U.S. Catastrophe losses, by states with largest losses, 2006
- Figure 13: Number of tornadoes, 1985-2006
- Population growth in high-risk areas continues
- Outlook for 2007-catastrophes becoming more expensive
- State-owned “citizens” insurance companies
- Analysis of terrorism attacks under way
- Alternatives to traditional commercial insurance
- Figure 14: Percentage of premium written by risk retention groups, by
industry, 2006
- Post-Katrina litigation
- Catastrophe modeling growing in sophistication
- Insuring terrorism exposure
- Regulatory environment
- Proposed repeal of antitrust exemption; McCarran-Ferguson
- Federal chartering of insurers: the debate continues
- Tort reform
- New legislation impedes class action cases
- Commercial lines-other specific issues
- Workers compensation
- D&O in aftermath of Enron
- Extended hours, extended risks
- Environmental coverage
- Medical malpractice: situation is improving but pendulum may swing in the
other direction
- Figure 15: Medical malpractice start-ups by year of commencement, 2002-05
- Figure 16: Start-ups by organizational structure, 2002-05
- Medical malpractice claims analysis
- Commercial auto underwriting
- Cyber threats, privacy protection and other emerging risks
- Some things never change…
- Market Size and Segmentation
- Premiums by product line for U.S. commercial insurance
- Figure 17: Net premiums written by line, property/casualty insurance,
2003-05
- Market concentration-market share of top ten companies
- Figure 18: Cumulative U.S. market share by top ten groups and companies
by line of business, 2005
- Writers share of market, by product line
- Commercial multiple peril
- Figure 19: Commercial multiple peril, market share by premiums written,
2005
- Commercial auto
- Figure 20: Commercial auto market share, by direct written premium, 2005
- Figure 21: Commercial auto, leading states ranked by direct premiums
written, 2005
- Workers compensation
- Figure 22: Workers compensation market share, by written premium, 2005
- Medical malpractice
- Figure 23: Medical malpractice insurers by market share, direct premiums
written, 2005
- Competitive Landscape
- Small business focus
- Automated underwriting as a competitive advantage for insurers
- Cooperative automation among carriers
- Branding/publicity campaigns
- Product introductions and enhancements
- Non-conventional risks generate moderate interest
- Figure 24: Importance of non-conventional risks, 2007
- Broker preferences
- Figure 25: Preference for key broker services and selection, 2007
- The Commercial Agent Survey
- Summary of consumer survey
- Characteristics of agents
- Share of business that is any type of commercial property/casualty
insurance
- Figure 26: Commercial property/casualty insurance as percentage of
agents' business, by gender and age, 2007
- Figure 27: Commercial property/casualty insurance as percentage of
agents' business, by education and employment, 2007
- Figure 28: Commercial property/casualty insurance as percentage of
agents' business, by census region, 2007
- Types of agents
- Figure 29: Type of agent, by gender, 2007
- Figure 30: Type of agent, by age, 2007
- Figure 31: Type of agent, by marital status, 2007
- Figure 32: Type of agent, by education, 2007
- Figure 33: Type of agent, by census region, 2007
- Length of time as an insurance broker
- Figure 34: Length of time as insurance agent, by gender, 2007
- Figure 35: Length of time as insurance agent, by age, 2007
- Figure 36: Length of time as insurance agent, by marital status, 2007
- Figure 37: Length of time as insurance agent, by education, 2007
- Figure 38: Length of time as insurance agent, by census region, 2007
- Commercial lines represented by agent
- Figure 39: Commercial lines represented by agent, by gender, 2007
- Figure 40: Commercial Lines represented by agent, by age, 2007
- Figure 41: Commercial Lines represented by agent, by marital status, 2007
- Figure 42: Commercial Lines represented by agent, by education, 2007
- Figure 43: Commercial Lines represented by agent, by census region, 2007
- What influences the choice of carrier?
- Figure 44: Factors that influence choice of commercial lines insurer for
clients, by gender, 2007
- Figure 45: Factors that influence choice of commercial lines insurer for
clients, by age, 2007
- Figure 46: Factors that influence choice of commercial lines insurer for
clients, by children under 18 in household, 2007
- Figure 47: Factors that influence choice of commercial lines insurer for
clients, by education, 2007
- Figure 48: Factors that influence choice of commercial lines insurer for
clients, by census region, 2007
- Experience in insuring businesses in disaster prone areas
- Figure 49: Experience in insuring businesses in disaster prone areas, by
gender, 2007
- Figure 50: Experience in insuring businesses in disaster prone areas, by
age, 2007
- Figure 51: Experience in insuring businesses in disaster prone areas, by
education, 2007
- Figure 52: Experience in insuring businesses in disaster prone areas, by
census region, 2007
- Distribution Channels
- Value of agencies
- Contingent commissions and the impact of the Spitzer investigation
- Market Forecast
- Commercial insurance
- Figure 53: Forecast of total U.S. net premiums written for commercial
insurance, at current and constant prices, 2006-11
- Personal and commercial insurance
- Figure 54: Forecast of total U.S. net premiums written for personal and
commercial insurance, at current and constant prices, 2005-8
- Forecast factors
- Appendix: Industry Associations
- Appendix: Advertising and Promotion
- Figure 55: Erie Ultrapack business insurance mailing, May 2007
- Figure 56: Farmers Insurance commercial mailing (garagekeepers), April
2007
- Figure 57: Zurich Insurance commercial mailing (travel agencies), April
2007
- Figure 58: Nationwide Insurance commercial mailing (golf courses), April
2007
- Figure 59: Progressive commercial auto mailing (Oregon), April 2007
- Figure 60: Conseco broker mailing, April 2007
- Figure 61: Progressive agent contest mailing, April 2007
- Figure 62: Progressive agent mailing, april 2007
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