NU Online News Service, July 7, 3:55 p.m. EDT

MarketScout insurance exchange reported that the U.S. propertyand casualty market remained soft, as rate declines for riskplacements continued moderating at a slow but steady pace.

The composite rate index for June 2009 was minus 6 percentcompared to minus 11 percent for June 2008.

Richard Kerr, chief executive officer of Dallas-basedMarketScout, said that "June renewals show rate declines thatcontinue to moderate, with many insurers waiting to determine howthe July 1 reinsurance renewals will impact capacity."

According to early reports, MarketScout is finding capacity forcoastal property decreased and property catastrophe capacity ingeneral is going to be tougher to secure.

Mr. Kerr noted that a decision by Berkshire Hathaway to curtailproperty catastrophe capacity has led to some speculation about thecompany's motives.

The question, he said, is "whether the company is trying toavoid losses and the resulting pressure on their balance sheet, orsimply limiting capacity anticipating higher rates."

Mr. Kerr advised that "smart insurers are retaining theircapacity until sensible risk return ratios are available," and"poor underwriting results are pending for some major insurers.Expect significant market movement in the next twelve months withclear winners and losers."

MarketScout calculates the U.S. p&c market condition byanalyzing data amalgamated at its insurance exchange (www.marketscout.com) and via in-person surveysconducted by The National Alliance for Insurance Education andResearch.

By coverage class, all classes either remained the same ormoderated further with the exception of workers' compensation,which changed from an average rate reduction of minus 7 percent inMay to minus 8 percent for June.

By industry class, contractors were the only class of businessthat experienced further rate reductions as compared to thepreceding month. By account size, small accounts moderated the mostat an average rate reduction of minus 4 percent.

Among industry classes, the firm said workers' comp at 8 percenthad the steepest rate decline. General liability was down 6percent. A 5 percent decrease in rates was recorded for commercialproperty, umbrella excess, professional liability and businessowners policy.

A 4 percent reduction was listed for inland marine, commercialauto, employment practices liability, crime and surety. Directorsand officers liability and fiduciary were down 3 percent.

By account size, jumbo accounts over $1 million were down 7percent; large accounts (from $250,000 to $1 million) and mediumaccounts ($25,001 to $250,000) were both down 6 percent, whilesmall accounts (up to $25,000) were down 4 percent.

Rates for industry class were down 7 percent for contracting; 6percent for manufacturing and service sectors; and 5 percent forhabitational, public entity, transportation and energy.