Soft Market: Beginning of the End

Last November online insurance exchange MarketScout said the soft market was showing signs of winding down after the average property/casualty rate decrease hit single digits in October 2008 for the first time in more than 20 months. Now  MarketScout’s analysis indicates the soft market is over because the property/casualty rate index fell below rate adequacy in the fourth quarter of 2008. However, MarketScout CEO Richard Kerr warned that it may take as much as a year for rates to actually start increasing. MarketScout put the average p/c rate decrease at 9 percent in December, unchanged from November. Commercial property, general liability and commercial auto (each down 10 percent) experienced the largest rate decreases. The line experiencing the smallest rate decrease was D&O liability (down 4 percent). Large accounts ($250,000-$1 million premium) saw an average rate reduction of 9 percent while small accounts (up to $25,000 premium) were down 8 percent, according to MarketScout. Check out the I.I.I.’s latest financial outlook for the industry.  

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