Premium prices are continuing their downward trend, capping a year in which they showed little sign of increasing, according to a report released by an online insurance exchange.
In its monthly recap of premium prices for the previous month, Dallas-based MarketScout reported that based on its figures, premium rates dropped 8 percent in December, only one point off from November's 9 percent drop, the lowest of 2006.
Looking at the year, premiums dropped an average of 6.6 percent in 2006.
Reviewing premium trends by coverage class, general liability closed the year down the lowest at 9 percent, followed by umbrella/excess and workers' compensation at 8 percent.
Eight other classes of business were down anywhere from 4 percent to 1 percent. Only crime and surety ended the month flat.
Large accounts (with premium between $250,000 and $1 million) and jumbo accounts (more than $1 million in premium) saw their rates drop 10 percent. Medium accounts (between $25,001 and $250,000) saw rates drop 8 percent, while small accounts ($25,000 or less) saw rates drop the least at 6 percent.
"This market simply is not turning," said Richard Kerr, chairman and chief executive officer of MarketScout, in a statement. "[The year] 2006 started soft and remained so all the way through December. Jan. 1 reinsurance renewals were soft. Property-casualty insurers increased their profitability dramatically in 2006 as compared to 2005. Bermuda is producing new opportunistic capacity almost every month. We expect the soft market to continue through at least the first two quarters of 2007."
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