NU Online News Service, May 7, 2:19 p.m. EDT
May property and casualty premium costs showed slight moderation in their downward trend compared to the previous two months of this year, according to MarketScout's monthly rate barometer.
The Dallas-based online insurance exchange released its monthly barometer on insurance premium rates, showing that p&c rates overall showed a decline of 3 percent, compared to drop of 4 percent on average for both March and April.
"General liability rates moderated in May," said Richard Kerr, founder and chief executive officer for MarketScout. "The trend of larger accounts getting deeper premium discounts continued. Small accounts realized a rate reduction of two percent, while jumbo accounts enjoyed reductions averaging five percent. Transportation, habitation and energy industries had the least premium reductions at minus-two percent."
By coverage class, of the 14 classes, only general liability and crime showed any shift in the average rate decline--both by one percentage point. General liability went from a drop of six percent in April to five percent last month. Crime, which came in down one percent in April, was flat in May.
By account size, segments changed by one percentage point on a month-to-month basis.
Small accounts (those up to $25,000 in premium), were down two percent. Medium accounts (between $25,001 and $250,000) saw rates fall three percent on average.
Large accounts saw rates drop four percent, while "jumbo" accounts (those generating more than $1 million in premiums) were down five percent.
In a note from Stifel Nicolaus reflecting on Market Scout's reports for the year, analysts said they are cautious about the performance of the commercial lines insurers--except for W.R. Berkley--but believed personal lines rates showed signs of better performance with improving underwriting results.
They also said that the reduction in soft market headwinds would be positive for insurance broker organic growth.