Insurance rates continued their precipitous slide, dropping 16 percent for the month of December and continuing a 34-month downward trend, according to an online insurance market.

Dallas-based MarketScout issued its monthly Market Barometer, based on the insurance exchange's figures, which showed the overall market drop for the year was an average 13.25 percent. MarketScout has been tracking the market direction since 2001.

Richard Kerr, MarketScout's chief executive officer, said, "We just don't have any appreciable evidence which would enable us to predict the market will harden in the first half of 2008. In fact, most of our research is pointing toward a continued soft market for all of 2008."

He noted that all reports indicate the industry will still make a profit this year, with loss ratios expected to fall below the 100 break-even point somewhere in the range of 91 to 95. The industry is expected to amass a profit of $27 billion, he said.

For December, both general liability and umbrella/excess insurance rates were down the most at an 18 percent decrease. Surety coverage showed the slightest decrease of 13 lines measured at an 8 percent decrease.

Of the four account sizes, small accounts saw the smallest decrease at 15 percent, while medium, large and jumbo accounts experienced decreases of 16 percent.

Examining accounts by industry class, energy accounts experienced decreases of 17 percent, the highest of seven industry classes. Public entities saw the smallest decrease, though still in double digits, at 13 percent. Manufacturing and contracting were down by 16 percent, while service and habitation were down 15 percent.

Mr. Kerr said that from 2001 to the present, a risk that involved a $100 premium had seen that premium increase to $162.60 in 2004--and that now has dropped to $126.24.

Special Reports /

Market Slide Continues; No Sign Of Hardening On Horizon

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