NU Online News Service, May 6, 11:41 a.m.EST

U.S. commercial property and casualty insurance premiums andcorresponding rates were down 4 percent last month, but an uptickis coming for energy rates, an insurance exchange executivepredicted.

"Energy premiums are going to increase, especially for offshoreaccounts," said Richard Kerr, chief executive officer of theDallas-based electronic exchange MarketScout.

He added that, "The disaster suffered by British Petroleum inthe Gulf of Mexico is huge and will have an immediate impact on alloffshore energy placements."

Mr. Kerr remarked that while British Petroleum is largelyself-insured, "energy underwriters across the globe willparticipate in this loss via either excess placements, insurance onthe non-operators (investors), drilling contractor or blowoutprevention manufacturer."

Further, he said, "The non-operators, Anadarko and Matsui Oil,have extensive insurance placements, as does the drillingcontractor, Transocean. It may take years to calculate the totalinsured loss from this disaster but premiums will increaseimmediately for offshore energy accounts."

And Mr. Kerr noted that, "even though onshore insureds may feelthey should not suffer because of offshore losses, they too couldbe impacted. Many onshore insurers have some offshore exposure andmay try to capture rate increases across the board."

Regarding rates for the past month, MarketScout said by coverageclass the biggest declines were for general liability, which wasdown 6 percent, followed by commercial property down 4 percent.

A 3 percent decrease was recorded for business interruptioninland marine, umbrella/excess, commercial auto and workers'compensation coverage.

Business owners policies and professional liability were down 2percent while a 1 percent decrease was listed for directors andofficers liability, employment practices liability, fiduciary,crime and surety.

By account size the biggest drop was for Jumbo accounts over $1million at 6 percent followed by 5 percent for large accounts from$250,001 to $1 million, 4 percent for medium accounts of $25,001 to$250,000 and 3 percent for small accounts up to $25,000.

Among industry classes the largest reductions were in theservice sector at 5 percent. Manufacturing and contracting rateswere down 4 percent followed by hatitational, public entity andtransportation at 3 percent. Energy rates were down 2 percent.

MarketScout said the National Alliance for Insurance Educationand Research conducted pricing surveys used in its analysis ofmarket conditions and the surveys help to further corroborateMarketScout's actual findings, which are mathematically driven byactual new and renewal placements across the United States.