I’ve asked our practice leader, Paul Becker, to come in and update you about the state of construction pricing today. ~ WillisWire construction blogger Tim McGinnis
Both anecdotal and benchmarking data from clients and carriers are suggesting rates are firming in construction—and in some states are accelerating quickly. New York is of particular note as carriers are adjusting pricing in construction due to losses arising out of NY Labor law 240—or “Scaffold Law”—and related statutes.
Clients should be budgeting for a minimum of 5% increases on average for renewals for good loss outcomes, with larger increases for clients with average or worse-than-average loss experience. This extends to both primary casualty and excess liability lines.
Builders risk and property coverages have already had increases starting in 2011, and these will continue in 2012.
Carriers Moving into Construction Casualty Lines
While increases are notable, the other interesting trend is new carriers seeking growth in construction casualty lines. There are a number of players now depending on the class and territory of operations. Carriers with expanded appetite include:
- Old Republic, which continues to grow
- Hartford, which just organized a true construction group for both middle and large accounts
- Liberty, which has brought middle market and major accounts together in early 2012
- XL, which continues its growth
as well as the traditional carriers for primary casualty:
This focus on construction, while offering additional options, is also a reflection of carriers’ views that construction spending will gradually increase and insurance rates will rise as well.
We will be watching these trends closely and continue to update our clients and associates throughout the rest of 2012.