CIAB Says Softening Market Continues
By Mark E. Ruquet
NU Online News Service, July 21, 4:11 p.m. EDT?Large commercial property-casualty accounts are reaping more of the benefit from a softening insurance market as premium rates continue to show declines, according to a broker's association survey.[@@]
The Council of Insurance Agents & Brokers, based in Washington, D.C., released its quarterly survey of brokers that indicates premiums are continuing their downward trend, averaging more than three percent less during the second quarter of this year.
Large accounts, producing commission and fees of more than $100,000, saw average rate decreases of minus six percent, while medium-size accounts (commission and fees of between $25,000 and $100,000) averaged slightly less than three percent. Small accounts (commission and fees of less than $25,000) saw average decreases of less than one percent.
"Terms and conditions are still tight, but we are seeing accelerated decreases in premium rates and a return of competition to the market," said Ken A. Crerar, president of CIAB in a statement.
Mr. Crerar said, "The questions now are how far and how fast will those rates come down. There are some mitigating factors such as reserve levels and the overall economic recovery that could serve as brakes on the market."
There were 157 brokers who responded to the survey, equaling the largest sampling of brokers to respond to the survey since it began in 1999.
The brokers said that many clients who did see an increase saw most of them in the one-to-10 percent range.
Overall, the survey showed no double-digit increases ranging from 10-to-100 percent, though the larger increases did crop up now and then as the survey looked at individual lines of insurance.
Of the 13 lines asked about in the survey, medical malpractice clients still sustained increases. Seventeen percent of brokers said premiums rose between 10- and 20 percent, while six percent said rates rose 20-to-30 percent. Eleven percent saw no change, while three percent saw decreases of one-to-10 percent. However, commercial auto had the greatest average increase for the quarter at .5 percent.
According to CIAB, commercial property had the largest decrease in the second quarter, with an average of more than minus 9 percent. Commercial property saw its highest average increases of more than 45 percent during the fourth quarter of 2001.
More information on CIAB is available at www.ciab.com.
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