NEW ORLEANS— Burns & Wilcox CEO Alan Kaufman says thewholesale broker is writing more business, and insurance pricing isincreasing, but market capacity and the economy are impeding therate of incline.

“Rates are firming, but not increasing that much,” says Kaufmanat the 87th annual meeting of American Association of ManagingGeneral Agents here.

Kaufman says pricing is not showing signs of retreat, withincreases averaging 5 percent. He says property and professionalliability are two lines where increases are higher than otherbusiness. Property rates are increasing significantly in Louisianaand Texas. Florida may finally “open some opportunity” if thestate's insurer of last resort, Citizens Property Insurance Corp.,pulls back from the property market.

Casualty is “not going down,” but it is not increasing by much,he adds.

He says rates remain low because of market over-capacity and theU.S. economy is “not booming.” Resolving the political discord inWashington will be necessary before businesses begins to pick-up.When the economy does pick-up, so will the need for insurance, butuntil then, rates still have a way to go, Kaufman explains.

Rates are averaging 20 percent below what they were in 2005 and2006, the benchmark he says underwriters need to reach forunderwriting profitability. In the meantime, the current gradualincrease in rates is on a sustainable trajectory.

Rate increases and the return of traditional business to thewholesale markets were credited for the second highest attendanceat the AAMGA annual meeting.

Approximately 1,125 members, associate members and othersregistered to attend this week's event here, which AAMGA PresidentR.C. Chaffin says underscores the wholesale community's desire toreinforce relationships between carriers and the MGA community asbusiness begins to pick-up.

Chaffin, chairman and CEO of Sea Coast Underwriters Inc. inCoral Gables, Fla., says companies are getting increases in therange of 5 percent to 9 percent and no accounts “are going theother way around.” His own agency saw an uptick in Casualty andprofessional liability accounts. Losses are catching up withcommercial auto writers, resulting in moderate increases, headds.

AAMGA President-elect Frank Mastowski, and chairman of Montvale,N.J.-based JIMCOR Agencies, says his firm is seeing large increaseson commercial and personal lines accounts post-Superstorm Sandy,enough where revenues rose 10 percent over last year. He attributesthe increase to the return of traditional risks—especially incatastrophe-prone areas—from the standard markets to the Excess andSurplus lines markets.

While standard writers are following the same pattern of cuttinglose accounts that no longer fit their appetite, he says this phaseof the market cycle is different from any he has seen in the past.Carriers are not abandoning whole books of business. Instead, theyare very selective about what they keep. He believes carriers aredoing a better job of data mining, digging deeper into their wealthof information before underwriting accounts and leaving tougherexposures to the non-admitted markets.

However, the rest of the country is not experiencing the samerate of increase, says Mastowski. Rates are rising in Texas andCalifornia for example, he says, but not as much as theNortheast.

“Everyone is recognizing the need for rate increases,” saysMastowski. “There is no investment income and carriers are beingforced to make a profit from underwriting.”