Insurers continued to pursue market share keeping pricing competitive in the fourth quarter of 2010, according to the latest Commercial P/C Market Index survey from the Council of Insurance Agents & Brokers (CIAB).
Commercial lines renewal rates on average declined 5.4 percent in the fourth quarter, compared with 5.2 percent the previous quarter. Council President Ken Crerar observed:
We didnÃ¢â‚¬â„¢t see any strong resolve by insurers to hold the line on pricing last quarter. The fundamentals donÃ¢â‚¬â„¢t add up, but competition still rules the day. Buyers still have opportunities to get more coverage at competitive prices.Ã¢â‚¬
One piece of good news is that demand for insurance appears to be picking up. Some 47 percent of brokers responding to the CIAB survey said they saw an increase in demand, compared with 34 percent last quarter and only 24 percent a year ago.
The CouncilÃ¢â‚¬â„¢s analysis comes after online insurance exchange MarketScout recently predicted that the soft market will come to a close by year end 2011.
Richard Kerr, founder and CEO of MarketScout said:
For those who have been asking for just Ã¢â‚¬Ëœone more hard marketÃ¢â‚¬â„¢, your time is coming. You have six to nine months to get ready. Be prepared. Those with the ability to rapidly deploy product will win big.Ã¢â‚¬
In its Q4 survey the CIAB said pricing remained soft across business lines and the rate of decline for commercial renewal pricing for small, medium and large business accounts remained roughly the same in the fourth quarter as in the third quarter.
Many brokers reported that carriers tried to hold pricing at renewal or introduce a small increase, but increases didnÃ¢â‚¬â„¢t hold where competition was strong.
Check out latest I.I.I. information on financial and market conditions.