MarketScout: Jan. P-C Rate Hike Slows To 1%

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NU Online News Service, Feb. 8, 2:02 p.m.EST?Property-casualty rate increases are continuing adownward trend, with the January price hike level registering atonly one percent, according to MarketScout.com, an online insuranceexchange.[@@]

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The Dallas-based MarketScout also noted, however, that theimpact of rate cuts felt by insurers won't be so dramatic. The firmspeculated that getting rid of some of the brokers' controversialincentive compensations will offset rate cuts.

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The one percent average increase in January is a slight declinefrom the previous month, when MarketScout said the rate hike forDec. 2004 came in at two percent.

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In a year-over-year comparison, the one percent increase lastmonth is far from the 11 percent raise reported one year ago duringJan. 2004, which itself was a slowdown compared to the 27 percentreported in Jan. 2003.

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MarketScout Chief Executive Officer Richard Kerr observed thatthe market is continuing its downward trend, but said while the"ultimate impact" of rate reductions will be felt by insurers, itwon't be as dramatic as first anticipated.

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Mr. Kerr said eliminating brokers' incentive compensation thatinsurers were paying will offset rate reductions, and that some?butnot all?insurers will pass these savings on to the ultimateconsumer.

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