The tough market that property insurance buyers faced in thefirst half of 2009 eased significantly in the third quarter,according to a report from Chicago-based brokerage AonCorp.

During the first half of the year, property insurance ratesincreased between 4 and 5 percent, and more than 20 percent in somecases. But in the third quarter, rates declined to an averageincrease of 0.2 percent, due to light losses, strong profits formost property insurers and a $463 billion increase in industrysurplus by the end of the second quarter, the report said.

About 25 percent of property buyers increased their limits inthe third quarter, compared with about 11 percent of buyers in thesecond quarter, indicating a competitive market, Aon said.

For D&O liability insurance, the hardening market thatfinancial institutions faced shows signs of easing, Aon said. Inthe third quarter, financial firms saw average D&O rateincreases of 3.2 percent, the first time that figure has droppedinto single digits in more than a year. The D&O liabilitymarket for non-financial firms remains soft, with average ratedecreases of 4.9 percent, the report said. New D&O liabilityinsurers, Berkeley Professional Liability, Everest Reinsurance andEndurance USA, have entered the market as insurers with financialtroubles in 2008 have recovered.