So, for those of you who are feeling the force of increasing workers compensation insurance premiums, take heart: There is some positive news that you're in for some level of relief.
A Softening Market
Further, the company says that there has not been any "withdrawals of capacity from the construction market in the last six months."
This has resulted in an "all-time high" market capacity, according to the report.
"At the same time the volume of construction projects in many parts of the world has reduced, intensifying competition between carriers for premium volume and market share in the construction insurance market," the company says.
So, it's a simple supply-and-demand model. As demand for workers compensation policies decreases, all other things being equal, there should be downward pressure on the price of those policies.
That's exactly what's happening here. Insurance companies, pressed for customers because of softening demand, are competing with one another by offering attractive premiums.
An "Influx of Capital"
The report also pointed out that "provided that detailed risk information is available, carriers are prepared to offer insurance buyers improved coverage, particularly improved contingent business interruption extensions."
Regarding the general property market, Willis also says that "premium rates are continuing to decrease by between 10 percent and 15 percent on claims free business. Even larger reductions are available for buyers who can clearly demonstrate robust risk management practices and detailed risk information."
Lesson learned: Risk management policies can reduce your insurance rates. Does your business have any level of risk control? If not, then you might end up paying more for workers compensation insurance.
James Nicholson is the Head of Broking and Industry Practice Groups for Construction, Property and Casualty at Willis. He commented: "Our view is that soft market conditions are likely to continue without necessarily threatening the profitability and solvency of carriers, provided that they actively manage their portfolios."
"For their part, corporate insurance buyers can achieve substantially better than average pricing through the provision of good underwriting data, the use of analytics to drive pricing and through strong relationships with carriers. The outlook therefore remains very favorable for corporate buyers and more particularly for the well-informed," he said.