According to MarketScout (www.marketscout.com), rates for property and casualty insurance slipped another percentage point, decreasing the composite rate to a decline of 3% versus a decline of 2% in May 2005. In June 2004, rates increased by 7% and in June 2003; they were increasing at an aggressive 18%.
Richard Kerr, chairman and CEO of MarketScout commented, “The slow, methodical market decline is continuing with property renewals leading the way. However, if TRIA is in fact altered considerably or eliminated, both property and workers’ compensation rates would be impacted. The result would most certainly be a cessation of rate reductions in these lines of coverage.”
Kerr also pointed out, “Most of the trends set in early 2005 are continuing. The larger the account, the greater the premium reduction. However, a trend that did reverse itself this month was the price decreases in corporate Directors and Officers coverage. While this line of coverage had been leading the decreases in prior months, it was flat in June, perhaps signaling a reversal of the downward pricing trend for this line of coverage. Underwriters are becoming concerned about how interest rates, the stock market, oil prices and other business dynamics will impact their insureds.”
The findings of MarketScout’s barometer are reportedly further supported by surveys conducted by The National Alliance for Education and Research. These surveys were conducted during CIC and CRM institutes held across the United States in June 2005.
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