Insurance prices continued their downward slide with most insurance brokers reporting no dramatic changes over the past three months, according to a broker association survey.

The Council of Insurance Agents & Brokers' fourth-quarter "Commercial Property-Casualty Market Survey" includes anecdotal evidence suggesting some carriers are beginning to abandon underwriting discipline in pursuit of market share.

CIAB said an analysis of the data by Lehman Brothers Equity Research found the average rate of decline to be 12 percent, slightly improved from the negative 13.3 percent experienced in the third quarter of 2007.

The survey found 70 percent of brokers' small account (defined as commission and fees of less than $25,000) premiums dropped 1-to-20 percent on renewals, while 77 percent of brokers said medium-size accounts (between $25,000 and $100,000 in commission and fees) saw premiums fall 1-to-20 percent. Sixty-four percent of the brokers said premium on their large accounts (commissions and fees over $100,000) dropped by the same percentage.

According to the Lehman analysis, small accounts dropped 8.4 percent, a 0.5-point decrease from the third-quarter survey's 8.9 percent. Medium accounts dropped 13.8 percent, a 1.2-point improvement from the third quarter's 15 percent.

The biggest quarter-to-quarter change in rates was in large accounts, with an average decrease of 13.8 percent in the fourth quarter, which improved 2.1 points over the third quarter's 15.9 percent decrease.

By line of business, commercial property and general liability had the highest fourth-quarter decreases at 13 percent. However, this was a 0.3-point increase over the third quarter's results for general liability of 12.7 percent decrease. Commercial property improved by 2 points from the third quarter's 15 percent decrease to a decrease of 13 percent in the fourth quarter.

Rounding out the top four were commercial auto with an 11 percent decrease and workers' compensation showing an 11.9 percent average decrease in this quarter's survey. Surety bonds showed the slightest change overall with an average 1.7 percent decrease.

The Washington, D.C.-based CIAB said that anecdotal evidence provided by the 120 brokers who answered the survey showed some carriers exhibited signs of abandoning underwriting discipline.

Brokers said some companies are beginning to write lines of business they have not touched in years, the CIAB noted, while other brokers pointed to loosening terms and conditions in the face of increased competition.

Special Reports /

CIAB Finds Insurance Price Slide Continues, Discipline Fades

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