According to Richard Kerr, chairman and CEO of MarketScout, an online insurance exchange with more than 50,000 users, the October 2004 composite rate for U.S. property and casualty insurance is 2%, down from 12% in October of 2003.
Kerr commented, “The overall impact of Mr. Spitzer’s investigation of the insurance industry is yet to be determined, but certainly the end result will influence the price of insurance for consumers. We are not sure at this time if that influence will yield a premium increase or a premium decrease. Sometimes good intentions deliver bad results. Time will tell.”
According to MarketScout’s latest market survey, most lines of coverage are decreasing in price.
“The hurricane season is winding down and despite projected insured losses in excess of $20 billion, property insurers continue to be aggressive. Property rates have moved up in coastal areas but over all, they still continue to trend downward. This is somewhat of a surprise as we expected at least a temporary price correction for the property market in general,” Kerr added.
MarketScout’s survey reported D&O rates are decreasing dramatically, from 15% to 30%. Most other lines of coverage are showing rate reductions except for heavy energy and transportation risks, which are experiencing small rate increases.
Kerr also stated, “Many insurance industry insiders feel a Bush Presidency is a victory for the insurance industry, perhaps not so much a reflection of Bush’s policies but more of a reflection of the negative view on Kerry and Edwards. Many in the insurance industry were concerned with the prospects of having a former plaintiff lawyer being one heart beat away from the Presidency. At least that concern has been laid to rest, enabling insurers to have a more positive outlook on the future. The result: More rate reductions.”
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