Pre-Katrina, Rates Kept Falling
Before Hurricane Katrina hit the Gulf Coast--perhaps causing a record insured loss of over $20 billion--the property-casualty market continued to soften last month, with rates down an average of 6 percent in August, according to MarketScout.com, an electronic insurance exchange.
As in the past few months, the bigger the account, the bigger the average decline in prices on a percentage basis. "Jumbo" accounts of over $1 million in premium saw rates fall an average of 12 percent, compared with "small" accounts with up to $25,000 in premium, at 5 percent.
"Post-Katrina, we expect the general property market to stabilize for a few months by offering renewal terms with rates as expiring, as opposed to the reductions we have seen in prior months," according to Richard Kerr, chairman and CEO of Dallas-based MarketScout.com. Commercial property rates were down an average of 7 percent last month.
"We do expect a turn in the energy market if Katrina does more than $2 billion in damage to offshore energy facilities," he added.
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