Property-casualty premium rates for November showed a continued downward swing with a composite decrease of 9 percent compared to the same period last year, according to MarketScout.
MarketScout, the Dallas-based online electronic insurance exchange, compiled its findings from its own submissions, interviews with industry executives and surveys conducted by the National Alliance for Insurance Education and Research.
The firm said workers' compensation and general liability represented the largest segment of the market and were down 9 and 10 percent respectively. Property, business interruption and inland marine continued to soften further with rate decreases of 4 percent. Crime and surety were the only coverages with price increases, which were up 2 percent.
“Effective product distribution is becoming more important to all insurers as the soft market continues,” said Richard Kerr, founder and CEO of MarketScout.
Mr. Kerr said, “Insurers must develop good relationships with agents who control profitable books of business in their underwriting target zone. Frequently, these agents are located outside of the major metropolitan areas where rates are not cut as deeply, largely because of the absence of intense competition that is generated by the larger, more aggressive retailers and wholesalers.”
“Reaching rural agents and their customers has traditionally been difficult. However, more of this business is now accessible via online aggregators,” he continued. “Even with access from the aggregators, this business can be tough to win because of the agent's loyalty to smaller regional companies who have been supporting them for years.”
Looking at account size, premium rates were down for all sizes. Small accounts were down the least at 7 percent, while medium size accounts were down 10 percent. Jumbo accounts were down 11 percent, and large accounts decreased the most at 12 percent.
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