A survey of major insurance brokers shows the market is continuing to soften and carriers appear to be broadening their appetite for business.
The Washington, D.C.-based Council of Insurance Agents & Brokers released its third-quarter market survey of its member brokers yesterday. The survey indicates that generally the market continues its downward trend.
Based on comments from the 108 member respondents, however, the downward trend does not extend to property catastrophe risk, which remains a very difficult market to place.
According to an analysis of the report prepared by Lehman Brothers Equity Research for the CIAB, average premium prices declined 5.3 percent in the third quarter. The largest premium decline was for large accounts (more than $100,000 in commission and fee), which decreased 7.3 percent.
Midsized accounts (commission and fees between $25,000 and $100,000) declined 5.1 percent. Small accounts (less than $25,000 fees and commission) declined 3.4 percent.
The report indicates that drops by line of business ranged from 6.9 percent for general liability to 1.4 percent for commercial property.
According to the report, the market has seen a steady decline since a modest increase in the fourth quarter of 2005.
Anecdotal comments reported by CIAB indicate that carriers are looking at lines of business that were the sole domain of excess and surplus markets a year ago, showing aggressiveness in pricing and liberalizing policy terms.
However, coastal exposures remain tough with tight capacity on wind, flood and property. Deductibles and exclusions are increasing, CIAB said, and some carriers are expanding their definition of coastal property for business to within 60-to-70 miles of the coastline.
Appetite is not clear among some carriers, and the problems are particularly severe in Florida and along the Southeast Coast, CIAB said.
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