As premiums fell an average of 2 percent in April, “large” accounts saw cuts twice that size, while “jumbo” insureds enjoyed 7 percent rate reductions, according to the latest “Market Barometer.”
This finding supports the trend uncovered in National Underwriter's Spring 2005 “State Of The Market Survey” (pages 12-22), which found risk managers enjoying a softer market than smaller buyers.
“The trend toward a soft market is continuing under a slow, methodic pace,” said Richard Kerr, chairman and chief executive officer of Dallas-based MarketScout.com, which bases its monthly “barometer” on data collected from agents participating in its online market, along with surveys by The National Alliance for Education and Research.
“Underwriters are reducing premiums but are clearly exercising an analytical, measured approach,” he added. “Interest rates are not high enough for the market to seriously consider the time value of money.”
Property rates were down an average of 3 percent, while workers' compensation, general liability and excess liability were each down 2 percent. Commercial auto rates rose 1 percent on average.
Caption for graph (no caption for barometer itself):
Flag: Size Counts
Head: Jumbos See Rates Dive
Caption:
It pays to be a big account these days, as the larger you are, the deeper your cut in premiums is likely to be.
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