Composite rates for U.S. property and casualty insurance coverages fell 13 percent for May, according to MarketScout, a Dallas-based electronic exchange.
The firm's latest monthly “Market Barometer” survey found most lines experienced rate reductions, as did industry classes and accounts broken down by premium size.
MarketScout said the greatest percentage reductions were in property, general liability and umbrella liability–at 14 percent each.
The line with the greatest overall drop from the same time last year was directors and officers liability–down 12 percent, compared with 1 percent in May 2006.
“The market is more competitive than the pure mathematical rate reductions reflect,” said MarketScout's founder and chief executive officer, Richard Kerr.
“Insurers are broadening coverage terms and conditions, thereby effectively creating greater net price reductions,” he added. “Some large admitted carriers are broadening the class codes they write in traditional businessowners programs.”
The same is generally true, Mr. Kerr observed, “for any line of coverage which was previously written in the excess and surplus lines market and is now being written by admitted insurers.”
The results for May 2007, by coverage class, showed the following reductions:
o Commercial property, 14 percent.
o General liability, 14 percent.
o Umbrella/excess, 14 percent.
o Workers' compensation, 13 percent.
o D&O liability, 12 percent.
o Business interruption, 12 percent.
o Employment practices liability, 12 percent.
o Professional liability, 11 percent.
o Inland marine, 10 percent.
o Commercial auto, 9 percent.
o Fiduciary, 6 percent.
o Crime, 7 percent.
o Surety, 5 percent.
The barometer survey also found that when it comes to reductions by account size:
o Small accounts (up to $25,000) were down 11 percent.
o Medium-size accounts ($25,001 to $250,000) were down 12 percent.
o Large accounts ($250,000 to $1 million) dropped 14 percent.
o Jumbo accounts (over $1 million), fell 13 percent.
The decrease by industry class was as follows:
o Manufacturing, 13 percent.
o Contracting, 11 percent.
o Service, 13 percent.
o Habitational, 14 percent.
o Public entity, 12 percent.
o Transportation, 10 percent.
o Energy, 12 percent.
The MarketScout exchange platform is located at http://www.marketscout.com.
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