Soft Market Persists

A near two year trend of diminishing rate reductions for U.S. property/casualty insurance placements has been reversed, according to latest rate surveys from online insurance exchange MarketScout and the Council of Insurance Agents and Brokers (CIAB). MarketScout reported the average property/casualty rate decrease was 5 percent in October, reversing a 21 month trend of moderating rate declines that went from a decrease of 15 percent in January 2008 to a decline of 4 percent in October 2009. MarketScout said the October rate reversal does not bode well for those looking forward to the end of the soft market. Meanwhile, the CIAB’s latest quarterly Commercial P/C Market Index Survey indicates rates on average declined 6 percent during the third quarter of 2009, compared with 5 percent in the second quarter. “A significant upward turn in pricing remains elusive for the foreseeable future,† said Council President Ken Crerar. On average, large accounts (>$100K Comm. and fees) declined 7.4 percent compared with the second quarter decline of 6.7 percent. Midsize accounts ($25K-$100K) dropped on average 6.5 percent, compared to the second quarter decline of 5.7 percent. The rate of decline for small accounts (<$25K) was 3.6 percent versus 2.5 percent in the second quarter, CIAB said. Check out I.I.I. information on the industry’s financial results and market conditions.

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