Dr. Robert P. Hartwig, CPCU
President, Insurance Information Institute
Robert P. Hartwig is president and chief economist of the Insurance Information Institute, which is generally recognized to be the most credible and frequently used single source of information and referral for the widely diverse insurance industry.
Before joining the I.I.I., Dr. Hartwig served as director of economic research and senior economist with the National Council on Compensation Insurance, where he performed rate of return and cost of capital modeling and testified at workers’ compensation rate hearings in many states. He has also worked as senior economist for the Swiss Reinsurance Group in New York and as senior statistician for the United States Consumer Product Safety Commission in Washington, D.C.
He is a member of the American Economic Association, the American Risk and Insurance Association, the National Association of Business Economics and the CPCU Society and from May 2005 to May 2008 served on the board of directors of the Independent Insurance Agents and Brokers Association of New York. In 2005 and 2006 Dr. Hartwig served on the state of Florida’s Task Force for Long-Term Homeowners Insurance Solutions.
Cost Drivers for Commercial P&C Insurance: 2010 and Beyond
Understanding the factors that drive claim costs is essential to sound risk management in any business. As 2010 unfolds, a variety of factors are surfacing that will pressure costs in 2010 and beyond. To many buyers of insurance, this may come as somewhat of a surprise given the six-year-old soft market across most lines of commercial property and casualty insurance and the erosion of exposure due to the “Great Recession” of 2008 and 2009.
Indeed, hard markets followed the deep recessions of both the mid-1970s and early 1980s. Factors that are pressuring claim costs include a deterioration in the tort environment caused by an erosion of the reforms put into place in the previous decade coupled with a dearth of tort reform under the current Congress and Administration. Medical costs are another major concern that continues to exert pressure on most key casualty lines with no end in sight. Inflation is a looming threat that could push up key materials costs, impacting claim severities.
As the economy recovers, favorable frequency trends in workers’ compensation and commercial auto could be reversed. Operationally, insurers are also grappling with very low investment yields, which reduces investment income putting more pressure on rate. Catastrophe losses, which were abnormally low in 2009, are expected to rise in 2010 and increase sharply in the decade ahead.
Risk Management Strategies in a Weak Economy Webinar
Thursday, February 25, 2010
11:00 a.m. CST
Topics Covered
Review of current claim cost trends in key commercial lines
Drivers of commercial claim cost trends
Why now (not later) is the time to be concerned
What you can do to mitigate emerging claim cost pressures
