The softening in the builders risk market over the last few years not only showed no sign of a turnaround in 2007 but has expanded into catastrophe-prone areas as well--particularly along the Gulf and East Coasts, despite hurricane concerns--as pressure builds for top-line growth and new capacity is being poured in, leading players in this niche warn.
The softening market came back "with more of a vengeance in 2007," according to Rick Girden, managing director of the property construction practice at Mercator Risk Services, which is a national wholesale insurance broker.
He explained that "based on how insurers did in 2006, they all had very, very lofty budgets for 2007, and very few markets even came close to meeting their budgets, so there's pressure for the top-line growth." This pressure, Mr. Girden said, is coming from stockholders, senior management and those putting up investment capital.
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