Standard & Poor's Ratings Services (S&P) expects commercial lines property-casualty rates to continue to drop, changing their initial prediction that they would be stable.
This decision was a result of the continuing decline in pricing for commercial lines and decreases in investment income. Based on industry pricing surveys and information from companies in second-quarter earnings releases, S&P says pricing in the second quarter for renewal business declined at a mid-single-digit rate in most lines and at a low-double-digit rate for new business.
Other factors that contributed to the change in expectations include deterioration in net investment income in the beginning of 2008 and an increase in net unrealized investment losses.
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