NU Online News Service, Jan. 13, 3:14 p.m.EST

With capacity high, commercial insurance buyers saw premiumprices continue to tumble in the fourth quarter, with few signsthat the soft pricing cycle is near an end, according to the RIMSBenchmark Survey.

The survey administered by Advisen Ltd. tracks changes ininsurance policy renewal prices as reported by North Americancorporate risk managers. Directors and officers liability, generalliability and workers' compensation all posted decreases in averagepremium, while property once again held steady.

"Things are pretty much in line with what we've been seeing forthe past few quarters," Dave Bradford, executive vice president ofAdvisen and editor-in-chief of the survey, told NUOnline.

He said what stood out in the survey is that although somesoftening was expected for workers' comp and general liability, "Iwas a little surprised it was as much as 5 percent--I was expectingmore like the 3 percent range, but I think this is just indicativeof the fact that there's still a lot of capacity in the marketplaceright now."

Mr. Bradford noted that a significant finding in the survey wasthe overall softening in D&O, which he said is attributable tothe fact that "we're not seeing the big increases in the financialinstitution sector that we saw in prior quarters," which he saidbalanced out the softening in the non- financial institutionareas.

Mr. Bradford said in a statement that pricing trends have been"remarkably consistent over the past several quarters. Thecombination of a weak economy, which has suppressed demand forinsurance capacity, combined with a very mild year for naturalcatastrophes, has kept downward pressure on rate levels. Unlessvery large catastrophe losses soak up excess capacity, we expect tosee this trend continue well into 2010."

Workers' compensation and general liability saw the largestdecreases, with average declines in renewal premiums of 5.5 percentand 5 percent, respectively. Average D&O premium fell 2.8percent, and property was essentially unchanged, falling less thanhalf of a percentage point.

Daniel H. Kugler, member of RIMS board of directors andassistant treasurer, risk management, at Snap-on Inc., noted, "Somerisk managers are reporting higher renewal premiums but, overall,the market continues to be very favorable for insurancebuyers."

He observed that capacity is abundant in almost every line ofinsurance. "As things now stand, there is little reason to expectcommercial insurance prices to increase in the near future. Morelikely, they will fall yet further."

While market conditions are benefiting insurance buyers, theyare contributing to growing financial stress on agents and brokersthat derive much of their income from commissions on insurancepremiums, the survey found. Not only is commission income downbecause of falling rates, the global recession has cut intoinsurance premium volume as companies downsize or go out ofbusiness.