2003_0630_packet - Laserfiche WebLink

Home

Rate guesses for 2004 H='s out best guess for what we might see in premium rates for 2004. We'd mss that these are verb early and very preliminary guess, are absolutely net guarantees. we need to complete this year's actuarial reviews and rate development work and also get a fore cation of what our reinsurance costs will be before we can give any definite answers on premium rates for 2004. But with those cautions, here's ghat the picture looks like at this point: • Liability. In general, liability lass casts seers to be holding stable. The 2003 law changing joint and several liability should help reduce liability costs over the next few years. Assuming no surprises in reinsurance costs, we're cautiously hopeful that we'll be able to keep liability rates flat for 2004. • Property. The cost of property reinsurance has been rising sharply over the past couple gears, and that's largely why LMCIT leas had to increase property gates in each of the past two gears. However, there are some indications that property reinsurance cost increases may be moderating. If so, and barring any ages in loss patterns, we're hopeful we can keep property rates to a moderate or even no increase. • Auto. Auto liability and property damage loss patterns have been stable. As with property, we hope to be able to keep rates to a very moderate increase. • Work comp. The picture here is less encouraging. Medical costs continue to rise sharply, and seem to be even higher than what we } d prod ouWd when we set the premium rates for 2003. That will again pert pressure on the rates for 2004. In order to keep rate increases to a nYinimum m the past two years, we squeezed the margin in the rates down to zero, so there's no room in the current rates to absorb any increase in loss costs. And failing interest rates paeans less income from investments, which in turn means any loss cost increases will have to be covered from premiums. We'll know more by late summer when we complete the actuarial review, but right now it loops like cities should be prepared for another work comp rate increase that could be in the 10% range, Of course, changes m the city" s exposure bases — payrolls, budgets, property values, numbers of vehicles, etc. — and in the city yPs experience rating will also affect an individual city's premiums. IV looking ' o places Here are some possibilities we'd suggest you consider: � o Y the stator min & limits for uninsuredlunderimwed motorist coverage. UMAJIM coverage is designed to help assure that an insured driver will be compensated if s/he is injured in an accident caused by a driver who doesn't have liability ' ce or who doesn't have enough liability insurance, UMMIM in effect steps into the place of the liability insurance the other driver should have had. In most cases, a city employee who's inured while driving a city vehicle will be 3