NEWS RELEASE – FOR IMMEDIATE RELEASE
HARD MARKET REMAINS ELUSIVE FOR COMMERCIAL PROPERTY/CASUALTY BUSINESS
WASHINGTON, D.C., October 28, 2009 – Rates on average declined 6 percent during the third quarter of the year compared with 5 percent in the second quarter, according to The Council of Insurance Agents & Brokers’ quarterly Commercial P/C Market Index Survey.
“Suppressed demand and appetite for business continued to drive competitive pricing in the market during the third quarter,” Council President Ken A. Crerar said. “It was still very much a buyer’s market as carriers chased market share. A significant upward turn in pricing remains elusive for the foreseeable future.”
Overall, rates for small, medium and large accounts decreased in the third quarter compared with rate decreases in the second quarter, according to charts prepared with Council data by Barclays Capital Equity Research.
Source: The Council of Insurance Agents & Brokers. Chart prepared by Barclays Capital Equity Research.
Brokers across the country reported soft market conditions. A broker from the Midwest said that “broader terms [were] available in addition to lower premiums. No change in available limits.”
Another broker found it easy to place business in the third quarter. “[I] can place anything currently.”
Despite competitive pressures, some carriers pushed for rate increases.
According to a broker from the Southwest, “Underwriters are trying to get slight rate increases, but in the end are taking slight decreases in order to get or keep the business.”
A broker from the Southeast said, “[Carriers] are trying to gain market share on new business and starting to push back rate decreases on renewals.”
The brokers surveyed noted two exceptions in pricing – the catastrophe market, particularly for coastal properties, and D&O for financial institutions.
“Underwriting? What’s that? Other than cat exposures or financial institutions,” a broker from the Southeast commented.
A broker from the Pacific Northwest said, “D&O limits are harder to get and rates are firming.”
“Property cat market is in a state of fragile stability,” a Northeast broker noted.
Meanwhile, the soft pricing continued to take its toll on the surplus lines market. “Standard underwriters continue to expand appetite and take business out of the E&S marketplace.”
The brokers also reported that they still were not seeing any improvement in their business from the recovering economy. The economy and health insurance reform remain brokers’ top concerns.
Click here for the full survey results.
The Council of Insurance Agents & Brokers is the premier association for the top national, regional and international commercial brokerage firms and agencies in the United States and around the world. Member firms have offices in more than 3,000 locations across 100 countries. Council members place more than $200 billion in commercial property/casualty and employee benefits premium worldwide. More than 16 percent of the membership is comprised of firms headquartered outside the United States. Founded in 1913, The Council is based in Washington, D.C.