BY BONNIE CAVANAUGH
MARKET CONDITIONS for insurance in the nonprof- it sector have shown sure
signs of a hardening over the past
six months, with prices stabilizing
overall and slowly inching upward
for some classes of risk.
“After several years of price
decreases in a very competitive
market, the trend now seems to
be toward steady pricing,” says
Christi Hatcher, managing director
for Markel Specialty Commercial,
a division of Markel Corp. in
Richmond, Va.
In fact, new business at
social-service organizations rose
“dramatically” in 2011 after many
years of a soft market, says Hatcher.
Markel, which serves a broad range of
social-service classes, is seeing increasing
activity in child-welfare organizations,
counseling centers, and group homes
and shelters.
And not only has Markel’s new business
“increased significantly, but the retention
rates are as high as they have been,” Hatcher
tells NU. “Overall, pricing has stabilized, and
price increases are sticking on accounts that
have tougher exposures or loss activity.”
The upward pressure on pricing
is especially noticeable in the area of
property risks, which can account for a
large percentage of a nonprofit’s exposures.
“The property market is definitely
changing due to the storm activity of the
spring and summer of 2011,” says Binford,
who points out that property deductibles and
other conditions are also getting a bit tighter.
“It’s not surprising that some types of
nonprofits, for example churches located
in Texas and Oklahoma, are a bit concerned
about their property
insurance,” he says.
Workers’ Comp insurance aside,
I don’t anticipate major or significant
premium increases at renewal: anywhere
from flat to 5 percent. But nonprofits will be
hard-pressed to see any renewal reductions.”
DRASTIC MEASURES
OFF THE DRAWING
BOARD—BUT LITTLE
ORGANIC GROWTH
Riley Binford, Executive Vice President at Charity First
Insurance Services Inc.
exposures include foster-placement services;
programs with clients who have emotional
and/or behavioral concerns; and accounts
that have off-site recreational activities.
Riley Binford, executive vice president
at Charity First Insurance Services Inc.
in San Francisco, agrees that overall
the nonprofit sector is seeing a firming
market, however slight.
In mid-2011, when
NU last checked in
on the social-services
market, insurers reported that some
social-service organizations, desperately
short on funds, were developing drastic
revenue-raising measures that, whatever
their financial promise, would have
significantly raised exposures and
endangered existing coverages.
For example, Charity First, an MGA
program manager for Travelers’ social-
services business for 25 years, last
year had to turn down a request
by a children’s group home that
had hoped to hire out its teenage
residents as laborers.
