While he doesn't think risk managers are yet “digging the foxhole real deep,” he noted they are “certainly in more of a foxhole mentality than in the past–and we're not sure what the enemy has on the other side of the line right now.”

Part of the problem is that “[primary] carriers don't have the investment book they used to have to fall back on to cover certain losses, the reinsurers' investment portfolio doesn't look wonderful, and corporations don't have a lot of ability for expansion–nor the ability to sell certain assets to generate cash and liquidity right now.”

Risk managers with captive insurers, he explained, are not immune to financial market trends, because their returns on investments last year were also “less than stellar,” he noted.

As a result, risk managers are examining their deductibles and determining whether they can afford to take larger limits or self-insured retention levels. Coverage considerations are divided into the “'compulsory coverage,' the 'nice to have' coverage and the 'luxury items,'” he added.

Any “luxury” items, however, are “off the board right now in many corporations,” Mr. Ewing said, explaining that what is determined to be a superfluous coverage depends on the industry.

“If you have business travel accident insurance out there and you only travel three times a year, that might be a luxury,” he said. “Every corporation will have to look within its own silo.” And this situation, he added, is “where it goes back to enterprise risk, as you go back to your CEO or CFO [explaining] these are my lists of what [coverages] we have to have.”

The result is “a lot of soul searching and insurance searching within the risk management office,” Mr. Ewing said. “There is no quadrant that has not been affected.”

He added that it's impossible to have a conversation about insurance with a board of directors “without throwing in that three-letter word–AIG.” Boards as well as chief executive officers and chief financial officers are asking “how much [of our coverage] is with [AIG], and also broadening the horizon to ask about financial strengths of other carriers–how viable are they in the marketplace, and are they going to be around.”

All in all, “risk managers truly are earning every dollar they're making this year,” he concluded.

An added consideration for buyers–hardening rates–recently was suggested by the latest results of the “Benchmark Survey” run via RIMS and Advisen, both based in New York.

Released in February, the survey found that although insurance premiums for businesses continued a five-year trend of falling rates during the fourth quarter of 2008, a reversal of the trend may soon be underway.

Insurance premiums for property, general liability, and directors and officers coverage all decreased at a “materially slower pace than in recent quarters,” according to the survey of policy renewal prices reported by North American corporate risk managers.

Data from the survey corroborated Advisen's recent forecast that the commercial insurance premium market cycle is close to its bottom. Advisen analysts projected that commercial insurance prices should begin increasing by the fourth quarter of 2009 or the first quarter of 2010.

Sarah Perry–president of the Public Risk Management Association, as well as risk manager for the City of Columbia in Missouri–said she anticipates a harder market for her Oct. 1 renewals.

I do know that our property carrier has already said, “If you're a good client and are taking care of the recommendations we've made, you should only see about a 5 percent increase.” On the other hand, the carrier added, “If you're not such a good client, or have outstanding recommendations, it's going to be a lot more.”

Part of being a “good client” she added, is keeping down the number of claims.

Ms. Perry, who purchases all insurance coverage for the city, said she traditionally budgets for 10 percent increases overall, “just to be safe,” but this year will budget for 15 percent hikes.

She said public entities are limited in how they can raise money to cover higher premiums, and as an alternative are looking at which services can be cut and which need to be kept in place.

While public risk managers don't have some of the concerns as those in the private sector, “because we deal with the public, we're seeing an increase in claims made by the public and often claims that have no merit,” according to Ms. Perry.

She said many are making claims that people would not have considered filing previously, due to the worsening economy, especially with so many losing their jobs.

“There's almost a feeling of desperation with some people,” she said.

For example, she said more of those who are picked up by the police claim they have been mistreated or abused. Another example is people who had small, miscellaneous losses in evidence for a year or more and did not claim them within the 90-day time limit are now coming back for those items.

“I'm also seeing more emotion attached to claims,” she said, which makes communication about the claims “much more difficult.”

William T. Hold, president of the National Alliance for Insurance Education and Research–a national insurance and risk management education organization based in Austin, Texas–observed that what is happening in the financial markets “impacts everybody,” even those businesses not currently in trouble.