Insurance professionals expect management liability and professional lines rates to increase up to 10% in 2013 and are concerned with expanding regulatory and compliance costs, according to a survey by Torus Insurance Holdings Ltd.
Demand for media liability policies from small to medium-size companies to address social media exposures also is expected to increase, according to the Torus survey, which was conducted at the 25th annual Professional Liability Underwriting Society conference in Chicago this month.
Eighty-seven percent of the respondents, which included 105 risk managers, insurers, agents and brokers, expect management liability and professional lines pricing to increase in 2013, according to the survey.
Increases of up to 10% were predicted by 67% of the respondents, and nearly one in five said pricing will increase by more than 11%.
“Poor loss experience in major classes coupled with increased exposures is driving rate increases,” said Jeffrey Grange, senior vice president and head of professional lines at Torus, in a statement accompanying the survey results. “2013 will be a challenging environment where coverage, limits and pricing are all on the table and actively renegotiated at renewal.”
Concerns about Dodd-Frank, JOBS Act
Nearly half of the respondents – 49% – indicated that the Dodd-Frank Wall Street Reform and Consumer Protection Act will have the greatest impact on professional liability lines in the coming year.
Concerning the Jumpstart Our Business Startups Act, 49% of the respondents said reduced compliance and disclosure are the biggest exposures on the directors and officers market, followed by crowd funding at 21%, according to the survey.
“The regulatory environment continues to move away from companies and their directors and officers, with an ever-growing burden of compliance and disclosure especially in an age of heightened financial sensitivity,” said Craig Grant, vice president and U.S. head of private company management liability at Torus, in the statement.
Social media exposures increasing
For small to medium-size companies using social media, the scope of exposures are increasing, said Christopher Cooper, assistant vice president of media liability products, in the statement.
Among the respondents, 33% said data leakage was the biggest risk that small to medium-size companies must address when using social media, followed by control over potentially damaging content disseminated by employees at 27%.
Nearly three in five insurance professionals surveyed at the PLUS conference expect increases in demand for media liability coverage, according to the survey.
“An increasing number of respondents to this survey recognize the need for broader coverage – specifically media liability coverage – due to the potential risks small businesses face when introducing this medium into their business model,” Mr. Cooper said.