Property-casualty insurers closed a year of declining prices for nearly all but dicey property-catastrophe exposures, as premium rates rallied slightly last month while continuing their downward trend, the monthly "Market Barometer" survey revealed.
In its monthly recap of p-c insurance prices, Dallas-based MarketScout reported that premiums dropped an average of 8 percent in December--slightly less than November's 9 percent drop, which was the biggest decline of 2006.
Looking at the full year, premiums dropped an average of 6.6 percent in 2006, MarketScout's survey revealed.
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. Even commercial property was off 3 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 fall 8 percent, while small accounts ($25,000 or less) saw rates drop the least at 6 percent.
"This market simply is not turning," Richard Kerr, chairman and chief executive officer of MarketScout, said in a statement.
Last year "started soft and remained so all the way through December," he added, noting that trends indicate more price-cutting ahead.
"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," he said. "We expect the soft market to continue through at least the first two quarters of 2007."
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