Protecting yourself: insuring property and business: every company should periodically review their business insurance needs to ensure they are protected from disasters and workplace issues.

• Author: Colby, Nicole A. Bonham

Though a series of economic factors and natural catastrophies left the insurance world reeling in the 1990s, that pattern has proven itself naturally cyclical, with the expensive lows balanced by periods of relative calm. Indicators suggest that commercial consumers, with regard to property and liability insurance premiums, may well enjoy a relative calm patch now and in the immediate future. That despite the residual effects of 9/11 and some impact from this year's continued pattern of natural disaster in the nation's southeast.

PREMIUMS INCREASED WHY?

In the early '90s, Florida hurricanes like Andrew left insurers with a wide swath of destruction. Insurance premiums jumped and business owners and general consumers, alike, felt the trickledown effect for several years. "We actually lost an insurance company in Alaska," remembers Jack Davies, president of Davies-Barry Insurance, a full-service insurance agency with offices throughout Southeast. He recalls how a national insurance carrier-though stable in Alaska-actually pulled its business from the state to concentrate its resources on the mountains of claims in Florida that stemmed from Andrew. Such natural disasters are only one of the many factors that influence insurance premiums.

"Increases that have been happening over the last three to four years, except for some specific lines, are pretty much leveled off," however, says John Grummett, vice president of Juneau-based Shattuck & Grummett Insurance, which has operated in Alaska since 1898. With 22 employees, Shattuck & Grummett offers its customers the convenience of two locations in Juneau and is balanced between personal insurance offerings and products for commercial operators.

"Increases are there because of ... poor underwriting, (which) caused businesses to quit writing those lines," he says. "At the same time, a big part of companies' income is investment income. Everyone was doing well in the stock market in '90s. They were able to buy market share. They were selling insurance cheaper than it should have been sold for."

That said, Grummett points out that two years ago insurance premiums for specific insurance products were in the same neighborhood as 1991 rates. "That goes to show that our business is cyclical," he says.

Still, as policyholders are well aware, there are always factors in the wings poised to further affect commercial insurance premiums. "You have rising health care coverage. Rising litigation costs. Those...