The decline of property-casualty rates slowed modestly in February, but the market remained soft, a leading electronic insurance exchange wholesaler reported.
Dallas-based MarketScout released its monthly report on the p-c market from its survey of rates, finding a 5 percent reduction in rates compared with 6 percent the month before.
“February is a traditionally slow month for insurance placements,” said Richard Kerr, chairman and chief executive officer of MarketScout. “The volume of business placed in February is small, so the slight hardening trend may reverse in March.”
He noted, however, that in February energy and jumbo accounts hardened, and umbrella and excess liability accounts softened. The overall market is still generating a composite rate reduction, but the trend of decreasing rates reversed a bit in February, he said.
According to MarketScout, energy accounts appear to be the only industry sector where underwriters are spreading the cost of hurricane claims across the market.
Offshore accounts continue to encounter rate increases of 20-to-50 percent. Onshore energy accounts are being assessed as well, with overall rate increases of 8-to-9 percent. The composite rate increase on the entire energy book is only 11 percent because of the larger volume of onshore versus offshore business.
Jumbo accounts are witnessing significant adjustment in the premiums. February rates changed from 12 percent overall reduction to 9 percent reduction, showing a clear progression away from rate decreases of the past several months, MarketScout said.
Traditionally, larger accounts lead the way in rate reductions because of their large premium size, market desire for the business and influence of publicly traded brokers, the firm noted.
The exchange said the tightening in this area may be an aberration, or it could be skewed by coastal exposures in the property portfolio of these larger insureds. Surveys by the National Alliance for Insurance Education and Research backed up this assumption, MarketScout said. Commercial property rates increased 3 percent overall for the month, according to MarketScout.
Excess and umbrella liability coverages showed continued softening with rates adjusting down another 1 percent, from an average reduction of 5 percent to an average reduction of 6 percent, according to MarketScout's figures.
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