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Buyers Adopt 'Foxhole Mentality' To Cope With Financial Crisis

A growing uncertainty pervading nearly every industry and company, no matter its size--not only in the United States but worldwide--has set the stage for a volatile commercial insurance market for buyers facing renewals this year and next.

By Caroline McDonald | Updated on April 05, 2009

A growing uncertainty pervading nearly every industry and company, no matter its size–not only in the United States but worldwide–has set the stage for a volatile commercial insurance market for buyers facing renewals this year and next, top risk managers and service experts report.

The outlook was summed up by Lance J. Ewing, vice president of risk management at Harrah’s Entertainment Inc., headquartered in Las Vegas, Nev., who suggested it might be time for buyers to adopt a “foxhole mentality” in protecting their organizations.

“The current insurance market is in a state of confusion,” said Mr. Ewing, former president of the Risk and Insurance Management Society. “We’re in uncharted territory now from a risk perspective. The usual ebbs and flows will not apply to the renewal market in 2009 and possibly into 2010.”

As a result, insurance rates will be determined on “a much more individual basis, and underwriters–at least the carriers I’m familiar with–have walked away from business that in the past 18-to-24 months they would have been happy to have,” he noted, adding that some carriers are “taking a pass at the plate and saying ‘No thanks, no interest.’”

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