U.S. property-casualty insurance rates are expected to keep falling through the rest of 2008, but not at the same pace as in 2007, according to MarketScout's monthly survey.
The Dallas-based online insurance exchange reported that rates for May on average were down 11 percent, compared to a 13 percent reduction for the same period last year, and 12 percent this past April.
“In the second half of 2007, rates declined an average of 14 percent,” noted Richard Kerr, founder and chief executive officer of MarketScout. “We don't expect similar rate decreases in 2008. Rates will be down, but certainly not at the same pace as 2007.”
By coverage class, commercial property and general liability saw the largest decreases in May, at 14 percent each. Professional liability and directors and officers liability were at the low end, dropping 6 percent each.
The manufacturing and service industries saw 12 percent cuts, while energy saw a 9 percent decrease. Contracting, habitational risks and transportation all saw 11 percent decreases, while public entity coverage rates decreased by 10 percent.
The size of the accounts mattered little with respect to how much the rate dropped. The Market Barometer survey reported that jumbo and small accounts dropped 11 percent, while large- and medium-sized accounts dropped 12 percent.
MarketScout said its Market Barometer uses internally gathered data plus in-person surveys. The findings are further supported by surveys conducted by the National Alliance for Insurance Education and Research. For more details, go to www.MarketScout.com.
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