Property-casualty rates declined 7 percent last month, a point more than in May and more than twice the 3 percent cut recorded in the same period last year, according to the Market Barometer published by MarketScout.

The Dallas-based online insurance exchange said that the soft market was now in its 16th month.

MarketScout Chief Executive Officer Richard Kerr said after the July reinsurance renewal season is completed industry analysts will have a much better picture of pricing for the rest of 2006, noting that almost 30 percent of catastrophe treaties renew this month.

"Property treaties with wind coverages or exposed assets are predicted to come in with 50 percent to 75 percent rate increases," Mr. Kerr said. "Other treaties should be flat or down slightly."

Of all the coverage classes, only commercial property, business income and crime posted any increase and both were at 1 percent.

Other entities, such as London-based Benfield reinsurance brokers, also see rising pricing as evidenced by Bermuda carrier figures, which are biased toward property catastrophe coverage.

While Bermuda insurers' profits rose for the first quarter, total premium actually declined as stricter capital requirements and more disciplined underwriting led to some cutbacks by carriers, according to Benfield analyst Chris Klein.

But some companies may have been holding back capacity in anticipation of a tight June and July renewal season, he added.

According to MarketScout figures, umbrella/excess coverage showed the greatest decline at 9 percent, while general liability insurance rates dipped 7 percent.

The rate of decline for workers' compensation pricing slowed to 5 percent in June compared to 7 percent in May.

"This is possibly a reflection of some new insurers' realization of higher than anticipated claims activity," Mr. Kerr said.

Directors and officers and employment practices liability insurance showed declines of 1 percent last month, MarketScout found.

In terms of account size, those jumbo accounts with over $1 million in premium enjoyed the sharpest declines at 10 percent, with medium and large accounts between $25,000 and $1 million seeing rates declining 8 percent. Small accounts decreased by about 7 percent.

By industry class, manufacturing posted rate declines averaging 8 percent, while the service sector incurred rates on average 6 percent lower.

Once again, energy companies faced rate hikes of about 7 percent followed by habitational coverages, which were up 6 percent.

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June P-C Rates Dip 7%

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