Insurance company executives said insurers have themselves toblame for the prolonged soft market, but also called on brokers tohelp insurers understand consumer expectations and to explain toclients what insurance companies offer besides just price.

At the Professional Liability Underwriting Society's Directors& Officers Symposium held in New York in February, JohnRafferty, senior vice president of Arch Insurance Group in Chicago,Ill., said that with respect to continuing rate decreases, “All wehave to do is say no.”

Speaking as part of a panel ofinsurance carriers, he noted that insurers have portfolios thatthey have built and that they like, and they do not want to seethose portfolios shrink or see certain accounts leave. “But at theend of the day, if you're thinking long term,” he said, “sometimesthe answer does end up being, 'We love this client. We were in forthe fifth decrease in a row. We might not be for the sixth.”

The underwriting community should have the outlook that theywill see the good accounts again someday, Mr. Rafferty advised.

Evan Rosenberg, senior vice president of Warren, N.J.-basedChubb, also said that insurers need to say no to further decreases,but asked brokers to help carriers understand what clientexpectations are. He said brokers do a good job of finding out whatthe clients want, and insurers could use better feedback in thatareas.

Michael Smith, president of the executive liability unit ofChartis in New York, also called on brokers to discuss more thanprice with clients. He said brokers should do a better job ofexplaining service aspects of different insurers, such as how theyhandle claims, or whether they have experience handling claims in agiven line such as D&O.

Panel moderator Lou Ann Layton, managing director of Marsh Inc.,took exception to any finger pointing at brokers for the prolongedsoft market. “You all agree it stops with you,” she said, “but thenyou get around to the broker.”

She stated that there are very few industries where distributiondictates the price. “We all have to take some responsibility,” shesaid, “but I think the [ultimate] responsibility has to lie withyou guys [the carriers].”

As for when the soft market might end, Mr. Rafferty said he doesnot believe the industry will collectively have enough pricingdiscipline absent a meaningful spike in claims frequency.

Mr. Rosenberg said he would love to be able to say rates willflatten next week, but he pointed to the level of excess capitaland the relatively weak catastrophe year in 2009 as factors keepingprices down.

For their part, buyers of D&O policies demonstrated in anearlier panel that they are aware of the importance of claimshandling, as mentioned by Mr. Smith.

During the panel, which analyzed the buyers' perspective, CarlMetzger, a partner at Boston-based Goodwin Procter LLP, said claimshandling is very important to risk managers when selecting aninsurer.

Ira Weisman, managing director, risk manager of Cerberus CapitalManagement, L.P. in New York, agreed and said, “Handling claimswill go a long way.”

During the carrier panel, Chubb's Mr. Rosenberg expresseddisappointment that so many accounts are being moved after thecarrier pays a big loss.

He said D&O and errors and omissions coverages areexperience-rated products. After an insurer pays for a loss,carriers should be able to rewrite the account with a higherpremium to earn some of that loss back, he said.

In the earlier buyers' panel, Diane Askwyth, a professional riskmanager in Chatham, N.J., said there is a sense of loyalty amongbuyers to help carriers that have paid out on a claim.

Regarding how buyers perceive their broker partners, Mr. Metzgersaid brokers competing for business should make sure they candeliver on the promises they make.

Mr. Weisman added that “brokers have a tendency to overpromise.”He also said it is up to brokers to be honest about what they cando for their clients.

Ms. Askwyth said brokers have an advantage if they can bring“intelligence capital” to the table, such as models and whitepapers. “But modeling has to be tailored to me and my business,”she noted. “Generic information is not useful.”

During a request for proposal (RFP) process, Ms. Askwyth saidincumbent brokers definitely have an advantage with respect toretaining business unless they have not performed.

But Mr. Weisman pointed out that incumbents cannot go into theprocess thinking they will automatically get the business.