Terrorism is partly to blame, but the insurance industry is also on the rebound from a long tailspin.
Talk to people in the insurance business and you’ll hear them explain today’s skyrocketing rates as bouncing back from a decade and a half of premium decay. In this case, the bounce resembles what you might get from a trampoline, thanks to the Sept. 11 terrorist attacks.
Insurance is a notoriously cyclical business with wild swings between a buyers and sellers market. Though it may not have felt like it, construction contractors were in an exceptionally long buyers market from about 1985 until the last couple of years. Rates were on an upward swing even before Sept. 11, especially for workers compensation and general business liability coverage, simply because losses were rising.