Rate Moderation Continues

Online insurance exchange MarketScout said the average property/casualty rate decrease was 7 percent in March 2009, compared to a double-digit rate decrease of 12 percent a year ago and an 8 percent rate decrease in February. While underwriters received a better net rate for each risk they wrote in March, their gross premiums probably decreased due to the impact of the current recession on almost all types of exposures, such as payrolls, gross receipts and property values. “The moderation in rate reductions will yield more premiums but declining exposures will more than offset the improved rate,† said Richard Kerr, founder and CEO of MarketScout. Commercial property and general liability experienced the largest rate decreases at 8 percent. The line experiencing the smallest rate decrease was surety (down 4 percent). Large accounts ($250,000-$1 million premium) saw an average rate reduction of 8 percent while small accounts (up to $25,000 premium) were down 7 percent, according to MarketScout. Check out I.I.I. information on the industry’s financial outlook.

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