NU Online News Service, Oct. 5, 2:36 p.m.EST

COLORADO SPRINGS, COLO.—Insurance brokers say carriers aresending a clear message to them—they want to get rate where theycan, but a weak economy and competitive pricing has them feelingglum about the prospects.

During interviews with NU Online News Service this week at theCouncil of Insurance Agents & Brokers' 98^th annualInsurance Leadership Forum held here at the Broadmoor Hotel,executives with leading insurance brokerage firms say carriers aresending clear signals that there is no broad-based increase instore, but the prospect of reduced earnings has them wanting toincrease premium.

David Eslick, chairman and chief executive officer of Marsh& McLennan Agency (MMA), says right now carriers are sufferingloss fatigue from the series of catastrophes they suffered throughduring the first half of this year. Where they may have expectedone catastrophe to alter the direction of the market it has nothappened.

Losses are straining reserves, and investment income continuesto drop. Ultimately, that means the only place left for carriers tomake money is through underwriting.

However, as insurers compete for business, they will not beginto get rate unless they exhibit “stiffer backbone,” Eslick says.“They need to take the initiative if they want more rate.”

George A. “Shad” Steadman III, vice chairman of Rutherfoord, amember of MMA, says that his sense of the markets is that “there isno significant firming of rates, but stabilization.”

Alastair Swift chief executive officer, global placements forWillis Ltd., says that when one examines all the underlyingindicators, it is clear that rates should be increasing, but theyare not.

“There are patches of rate firming,” he says, pointing to someareas such as catastrophe property and workers' compensation. Yetfor other lines, such as directors and officers, some risks can seedouble digit decreases.

“There is not a general shift in the markets,” says Swift.

When there is talk of increases, he says clients are examiningtheir retentions, assuming more risk and purchasing less insuranceto lower the price. And if that doesn't work, the account can beshopped around.

“There are plenty of markets lining up to take the business,”says Swift.

However, the economy still hangs over every decision.

“A big concern is do customers have the money to pay forincreases?” he notes.

“There are two forces pulling on one another,” observes EricAndersen, CEO, U.S.A. for insurance broker Aon. “Clients have theireconomic challenges and that is not leading to new insuranceopportunities, while carriers are dealing with making lessmoney.”

For carriers, he says the current market has them “verydepressed” and fearful that the same factors that are keepingprices depressed will continue for the next 12 to 18 months.

H. Wade Reece, chairman and CEO of BB&T Insurance Servicessays there is also uncertainty about the direction reinsurers aregoing to take, and some carriers are still vetting the RMS 11 newmodel revisions that have increased the exposures for some.

“That creates angst in the market,” he says.

“Having said all that, there is clear belief that there will besome turn on price,” says Reece adding it will be on a line-by-linebasis; not industry wide.

One positive sign for insurers is improvementin the wholesale market, says Reece. BB&T owns the wholesalebrokerage firm CRC Insurance Services.

The excess and surplus lines market is seeing a little increasein rate and some business that left for the retail market is comingback to the wholesalers. He says part of the reason is thatcarriers are becoming more disciplined in their underwriting.

He says usually when this begins to happen “it's a good sign forthe industry.”

Kevin Brogan, managing director, national practice leader,property and casualty products and services for Wells FargoInsurance Services USA, Inc., says that in some markets there aresignificant changes taking place for commercial accounts, primarilyproperty risks with any exposure to wind, flood or catastropheexposure.

However, property accounts without these exposures may see smallincreases, but probably not enough to satisfy insurers' need forunderwriting profit.

He says overall, the markets will probably experience acontinuation in 2012 of 2011, barring some significant loss thatmoves the markets.