Quote Firm Finds P-C Rate Softening Continues
NU Online News Service, Jan. 6, 3:35 p.m. EST?Property-casualty insurance rates have continued to soften in the last several months for most standard lines of coverage, according to data released today by an online quote service for agents.[@@]
In reporting that finding, Richard Kerr, the chairman and chief executive officer of MarketScout said his numbers discounted an "aberration" resulting in a two percent hike for premiums on average. The rise, he said, was due to "additional premium increases in difficult lines of coverage. Also, some major insureds are not enjoying rate reductions and there was some difficulty in securing year end reinsurance for a few programs with poor underwriting results."
Standard lines of coverage, Mr. Kerr said "continue to show signs of softening. The cumulative result is a 12 percent increase in premiums for December 2003, up two percent from November 2003, but certainly down from the 30 percent rate increases in December of 2002."
MarketScout's December 2003 barometer of the marketplace rates labels the current situation as "tight." It classifies raises of 30 percent or more as "hard" and 40 percent or more as "destructive." A market that is without increase or decreasing in rates is labeled "soft."
MarketScout is used by retail insurance agents to locate insurance quotes from an insurance company "with a proven success in a particular industry or coverage class," the company said.
The firm said its quotes are provided from over 60 different insurance companies. Quotes come from companies that provide only "Best of Class" service and premiums to insurance agents and their clients via an online "e-Industry Specialist".
MarketScout said the insurance products it distributes come from "A" rated insurance companies representing over 300 different industries and coverage classifications.
According to the company, over 50,000 agents have registered to use MarketScout allowing it to gauge the overall state of the Property & Casualty market. The firm said it has developed its "Market Barometer" to reflect the condition of the market on a monthly basis.
MarketScout said its barometer is calculated based upon data points which may include information such as: percentage of increase or decrease in renewal premium, percentage of accounts renewing "as expiring," changes in coverage terms, number of insurer insolvencies, number of insurers entering or departing a particular market, market perception and agent and broker compensation.
Also factored in are reinsurance terms and conditions, interviews with agents, brokers, insurers and reinsurers, online survey input from agent subscribers and captive market activity.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
