Brokers cautious, but still optimistic - Washington Business Journal:

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Commercial insurance carriers and agentsin Denver, and theirr clients, are feeling the effects of the recession. “Ths major drivers of insurance premiumsare payroll, property value, vehicles and All of those have gotten hit,” said Todd senior vice president in the Denver officr of LLC, a commercial insurance and risk management consultancy. Colorado’s construction which has had a sizeable drop in payrolls durinfthe downturn, is a particular area of concernm for insurers.
Rich Rogers, Southwesf regional president for property and casualty carrie rin Denver, said workers’ compensation and general liability coverages make up a significan portion of his company’s So declining construction payrolls can hurt his “We are still writing new accountsz in construction, but opportunities have been slowed down by the he said. Despite the bad economy, carriersd and agents in Denver see reasonxsfor hope. One is the stabilizing rate environment for property andcasualtu (P&C) insurance.
According to the Council of Insuranc e Agents andBrokers (CIAB), rates for all type s of P&C insurance have declined steeply since 2001, putting pressure on premiums and commissions. Now that tren is beginning to moderate: Rates declines by 5.1 percent in the first quartedof 2009, versus a decline of 13.5 percenyt for the same period in 2008. “Iv we have hit the bottom of this all of the insurance agent communitgywill rejoice,” said Ed Harrington, CFO of Denver brokert and risk management consultancy . But the downturmn also has created new opportunitieds for localinsurance companies, as corporats clients of all types revisit their policies, looking to controp costs.
On one hand, this wave of cost-cutting posee a challenge to the As one broker noted inthe CIAB’es first-quarter market survey on the commercia l P&C sector, “The crisis … has diminished consumere funds available to spend on From another perspective, though, the trend toward cost contro means some insurance firms are seeingy opportunities to capture business that may not have existed previously, sinced companies looking to maximize value from their insuranc e spending may switch carriers or agents.
The widely publicizee problems at AIG and ratings downgradesa of other major providersx also have playeda role, as more customers have growbn cautious about their carriers’ financial According to Travelers’ Rogers, “Our new applicationb flows are definitely up, whicyh means there is some activity being driven by clientsa needing to get their costs down and ensures that they’re with a financially stable company.” The drive to reduce expensee also has generated activity on the employee-benefitz side.
Colorado insurers have seen increaser demandfor less-expensive such as high-deductible health care which enable employers to reduce premium costds and potentially decrease employees’ monthl payroll deductions. Higher out-of-pocket costs for employeesx can be partially managedthrough tax-shielded healtjh savings accounts. “There’s more demand for innovative approaches that enable organizationas to offer comprehensive benefits programs to employee s at a reasonable saidMichael Faughnan, senior vice president with an employee benefits and HR programse specialist in Denver.
There’s also more interest in wellness programs, whicn aim to reduce long-term health costz to employers and their work forces by identifyingh and managing employeehealth risks. Voluntary life and disability coveragre products have grown as Employer cost-cutting has helped results for these lines since companies are looking for ways to offer enhanced benefitss without incurring additional costs, according to Gary regional manager of the Denverf Group benefits office for , a large seller of grou p disability insurance.
Voluntary coverage options can be offere to consumers at discounted rates throughtheir employers, with the employee paying the cost of the Also helping sales has been the uncertainty surrounding the potentia evolution of the health care-insurancew industry in the next several years.