He explained that the citys coverage is negotiated every five years. In the past, he said, “we could at least get a three-year rate guarantee, but not now.” However, he said, “we were able to get back to a manuscript form [with] a lot of coverage enhancements” that could not be obtained over the last two years.

Enhancements were added “for things such as underground pipes and underground storage tanks, which are important for a municipality,” he said, explaining that underground tanks can be used for water, oil or gasoline. Since the city had not been able to obtain the coverage for about two years, “we've been bare,” he said. “This year we were able to get that,” although the city had to change insurers to do so.

In the past, he said, the municipality was able to obtain “a monster blanket coverage of $4 million” for property, which provided “peace of mind.” Since that has been unobtainable recently, its been necessary to come up with a specific valuation for every building and every site, he said.

“This is a lot more work and it causes you to take a very close look at valuations at all of your sites because if you underinsure you're in trouble,” he said.

As for carrier relationships, he said, “We rarely ever touch our insurance carrier. We finally had one hit from an excess workers comp standpoint this year. I've been here 15 years and that is the first one that I can remember touching the excess comp area.”

He said the municipality has been self- insured for liability for about 15 years, “and we've never touched them.” However, he said, retentions have risen from $150,000 to $250,000 per claim.

John Matthews, corporate director of risk management for Harrahs in Memphis, Tenn., looking ahead to his companys property renewals, said he is looking to improve terms and conditions that were given up a couple of years ago.

“I think the property market is flat [or] stabilizing,” he said. “So we're looking for some improvement in terms and conditions such as definition of loss, coverage terms and business interruption.”

In the casualty area, he said, “we're trying to hold the line. From what I understand, casualty excess umbrella is still going up.”

He noted that the companys casualty coverage renewal date is June 1. Property and directors and officers renewals are slated for March.

“We restructured our D&O program last year, so we're looking to hopefully see some reduction there or at least flat,” he said. “Last year we came off a four-year D&O program, so we suffered a big change,” he reported, without quantifying the extent of the rate change or elaborating on changes in terms.

Now, coverage is determined on a year-to-year basis. “I don't see any multiyear programs anymore on anything. It makes life easier when you do [have multiyear programs],” he said.

Mr. Matthews said the company has established a captive insurer, domiciled in Bermuda, for primary layers for workers' comp and general liability. Excess casualty and excess workers' comp are purchased from the traditional market.

At USAA in San Antonio, Texas, Jeff Bernor, enterprise risk manager, said the company is busy preparing for March renewals. “Were in better shape now than we were in October or November,” he noted. “The market looks better and thats what our brokers are telling us,” although the extent of improvement depends on the line of coverage, he said.

He continued that property was the first to stabilize, and “were starting to see some stabilization in the excess markets, which is really where the pricing remained volatile throughout the whole year last year.”

One of the biggest things his company and its brokers are focusing on is a commitment to quality, he said. To achieve this, the company has utilized the Risk and Insurance Management Societys “Quality Improvement Process” to “set expectations,” he said. “Were seeing some results out of that,” he reported.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, January 23, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.