The soft market is nearing its end as price decreases begin to show signs of moderation and the financial turmoil begins to take a toll on insurance company earnings, according to the chief executive of electronic insurance exchange MarketScout.
Richard Kerr, CEO of Dallas-based MarketScout, said: "For the last several months rate decreases have continued; however, the decreases are moderating. The financial markets have experienced a meltdown, several major insurers are in serious trouble, underwriting results are slipping, and investment income is anemic at best. As a result, the soft market is winding down."
Leading up to the current situation, "for 42 consecutive months–from July 2001 to February 2005–the composite [property-casualty] rate increased every month," he said. "Beginning in March 2005, rates started to drop and the current soft market began."
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