How have property insurance placements changed over the years?
In the past, property insurance for commercial business owners could be placed with a single carrier putting up the entire all-risk limit. Sublimits would be imposed on certain coverages including catastrophic perils such as earthquake and flood. Coastal wind and terrorism were included in the all-risk limit on a per-occurrence basis. The sublimited CAT perils were aggregated on an annual basis, meaning that the single limit would apply during the policy term, and were subject to higher deductibles. If additional catastrophic limits were required, one could access additional capacity in the difference-in-conditions (DIC) marketplace for excess layers. This structure was effective because the all-risk carriers would provide coverage for very low rates on noncatastrophic perils. The DIC marketplace had an abundance of capacity, which created downward pressure on pricing due to competition. After the hurricanes of 2005, insurance companies were forced to reduce the capacity they could off
