However, as it turned out, most carriers were able to keep writing business at reasonable prices, and shrinking demand forced many to cut rates to retain the good business they still had on their books.

Add to that a thankfully mild hurricane season–the calmest in 12 years, with only three Atlantic basin storms, according to the Insurance Information Institute–and you end up with a stubbornly soft commercial coverage market.

Price cuts have moderated–the average commercial premium fell 5 percent in October, compared to 9 percent in December 2008, according to MarketScout's Market Barometer survey. But rates are still falling for most. Unless an account has catastrophe-exposed properties or claims related to the Madoff Ponzi scheme or the subprime mortgage meltdown, buyers are sitting pretty.

MarketScout CEO Richard Kerr back in June chastised an anonymous “terrible trio” of carriers for being “irresponsible underwriters.” He said “every sensible economic indicator tells us rates should be increasing, yet there are still three large, admitted, publicly traded insurers clamoring for premium, seemingly at any rate and continuing to prolong the soft market.”

“Even the E&S market is refusing to chase rates down, sitting on the sideline as the terrible trio slash each other to bits,” Mr. Kerr added.

“Once these irresponsible underwriters are reined in, we should be on the way to rate increases,” he said. “Our guess is prudent insurers are waiting to pick up the fallout when the terrible trio have their day of reckoning.” However, he warned, “until that occurs, the soft market will continue.”

At the time, Mr. Kerr predicted that “the turn will come by year-end because all but the terrible trio are making appropriate underwriting decisions.”

Yet here we are in December, with no turn in sight (and still with no clue just which carriers Mr. Kerr was talking about).

Last month, NU's Mark Ruquet reported that “the soft market direction seems to be defying business logic,” citing a report from Advisen, titled “Planning for 2010: The Recession Will Keep Commercial Insurance Premiums Under Pressure.”

“Like the zombies in the classic horror film 'Night of the Living Dead,' the soft insurance market should be dead and buried, but it continues to lurch on, terrorizing underwriters and brokers,” wrote Advisen Executive Vice President Dave Bradford.

No wonder the p&c industry's first-half income was down nearly 60 percent, despite an improvement in underwriting losses. Net written premium volume fell by 4 percent–down about $9.4 billion. The outlook for 2010 doesn't look much better for insurers.

“If a hard market is coming, it's up the road a bit,” said Ken A. Crerar, president of the Council of Insurance Agents and Brokers, in CIAB's second-quarter report.

“Suppressed demand and appetite for business continued to drive competitive pricing in the market during the third quarter,” he said. “It was still very much a buyer's market as carriers chased market share. A significant upward turn in pricing remains elusive for the foreseeable future.”