Friday, May 6, 2011
While property/casualty rates continue to decline they are doing so at a slower pace, according to two market surveys.
There were signs that the market may be flattening and modestly easing upward in some areas, according to The Council of Insurance Agents & Brokers First Quarter Commercial P/C Market Index Survey.
Commercial lines renewal rates on average declined by 2.9 percent in the first quarter of 2011, compared with a 5.4 percent decline in the fourth quarter of 2010. Council President Ken Crerar observed:
Itâ€™s too early to tell if the leveling off and modest price increases were a result of the fallout from the recent Japan disaster and other catastrophes earlier in the year, or if the market is reacting to broader market conditions.â€
Future catastrophes appear to be a concern among insurers. One broker responding to the CIAB survey noted:
Carriers seem concerned about the future CAT season. Weâ€™re only three months into the year and weâ€™ve had a very active year already. There are still nine months of flood, tornado and hurricane seasons and this could certainly impact the marketplace.â€
Meanwhile, online insurance exchange MarketScout reported that moderating trends continue into the second quarter, with the composite rate for U.S. P/C insurance down four percent in April 2011, unchanged from March.
General liability and umbrella coverages priced most aggressively among coverage classifications at minus 4 percent. When including the large volume of non-catastrophic driven business property rates were down 3 percent, according to MarketScout.
Note: catastrophe-exposed properties assessed a slight rate increase of 1 percent to 4 percent.
Workersâ€™ compensation, professional liability, directors and officers (D&O), employment practices liability insurance (EPLI) and fiduciary coverages were all flat.