Terrorism is partly to blame, but the insurance industry also is on the rebound from a long tailspin, explains Jim Olsztynski.
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 buyer's and seller's market. Though it may not have felt like it, trade contractors were in an exceptionally long buyer's market from about 1985 until the last couple of years. Rates were on an upward swing even before 9/11, especially for worker's compensation and general business liability coverages, simply because losses were rising.