Every line of business except workers' compensation is “showing a decrease in the rate of rate increases,” he said. “We're still getting increases in most lines, but they are much smaller than they used to be.” Fiduciary liability, he added, is “not totally bucking the trend,” but is also not falling as quickly as most other coverages.

In the first quarter, the RIMS survey found that premiums for property insurance fell by about 1.5 percent. General liability prices also dropped by 1.4 percent marking the first time in more than four years prices for two major lines of insurance retreated in the same quarter, Advisen said. The cost of property insurance fell 8.8 percent in the fourth quarter of 2003the first decline in premium prices for any major line of commercial insurance since 2000, according to the survey.

Price hikes in other lines also continued to slow, as employment practices liability and, most notably, directors and officers liability experienced increases below 5 percent.

While Mr. Bradford predicted increased competition and falling rates as in the previous soft cycle, “our models show this will be a much shorter and shallower soft market than the last go-around,” which he noted lasted about 10 years.

His extended projection was that the overall market will be “genuinely soft” by the end of 2004. “Some will buck that trend, but the major lines of business look like they will be experiencing overall rate decreases by the end of the year,” he said.

He added that “industry financials” are such that a soft market can't be supported for an extended period of time. “So it remains to be seen at what point they level off and start rising again in the not-too-distant future.”

However, Mr. Bradford noted that perhaps “the bigger conclusion” of the survey is that there has been a “fundamental shift in the infrastructure and the dynamics of the entire industry.”

“The cast of players is changing in the standard market,” he said. “A lot of the venerable old names are still pretty dominant,” but a new cast of players “are rapidly coming up and achieving some fairly substantial gains in the three years that we've tracked in the most recent survey.” Most of these players are Bermuda-domiciled, he noted.

“Certainly the older companies–ACE and XL have achieved pretty dominant positions, but also the newer ones like Arch and Axis that have comparatively small market shares have risen dramatically in their short life spans.”

He said that “the efficiency with which new capacity can be deployed in Bermuda” makes it unlikely we'll ever see the sort of capacity shortages and outright unavailability in certain lines that plagued the market in the mid-1980s.

Mr. Bradford added that the growing alternative market of captives and other self-insurance vehicles is “very clearly a new source of capacity and a real safety valve.” The amount of premium “that has been draining out of the standard market” is considerable, he said. “The alternative market is significant direct competition to the standard market now.”

RIMS President Nancy Chambers said the interactive nature of the benchmarking survey is a “great tool” for risk managers, who can tap into the data previously only available in hard copy “to look at the costs and the programs and compare them to their own, and look at the updated marketplace data.”

Being able to go online to view the latest survey data “provides a window into the current purchase patterns,” added Ms. Ms. Chambers, who is risk manager for the Waterloo Region Municipalities Insurance Pool in Kitchener, Ontario. Insurance buyers, she noted, also can “manipulate the data to do reports and comparisons in the format that they need.”

Reproduced from National Underwriter Edition, May 21, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.