Insurance market prices may be dropping, but the movement that is underway is one of market correction, not an out of control plummet in rates, according to a wholesale insurance broker's analysis.

Edison, N.J.-based NAPCO, in its 2007 "Property Insurance Insights" report, said that in its view the current downward market trends are "a move toward reality-based pricing."

"We think it would be unwise to view end-of-year aggressiveness as the beginning of a property insurance freefall," the report said. "Instead, we believe that we are in the midst of a necessary correction to the market's overreaction to KRW [Hurricanes Katrina, Rita and Wilma in 2005], and we are witnessing the efforts of insurers and reinsurers to find the balance between underwriting discipline and returning shareholder value."

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