NU Online News Service, May 24, 2:59 p.m. EDT

The commercial transportation insurance market is far from hard and in some segments--like charter buses and ambulances--first-quarter 2010 prices were lower than they were last year, according to a just-published survey of market participants.

The first-quarter survey is from NIP Group, a Woodbridge, N.J.-based wholesale broker and program manager, and is known as TIPS, an acronym for Transportation Insurance Pricing Survey. The study tallies responses to questions about market condition from leading transportation insurance brokers, wholesalers and underwriters representing thousands of account placements, NIP said.

Richard Augustyn, chief executive officer, said there are no signs that the transportation market is turning around, based on the first-quarter survey. "Instead, we observe rates continuing to fall with increasing intensity almost across the board."

"It appears we are experiencing another leg down in rates," he said in a statement released with a high-level summary of results.

The summary noted:

o Pressures continued to intensify for the medium and large account sizes in almost all market segments and lines of business.

o More than 95 percent of respondents reported that during the first quarter of 2010, the transportation insurance market was flat or softer when compared to fourth-quarter 2009.

o More than half of respondents believe underwriting capacity has increased with more insurers active in the transportation market.

Survey details graphically reveal the extent of premium rates for 10 different segments, such as the charter/tour bus operators and ambulance segment.

For the charter/tour bus operator segment, more than 70 percent of insurance market participants said rates were down, with more than 35 percent reporting declines between 10- and 20 percent. Another 24 percent observed single-digit rate declines.

For ambulances and other forms of medical transport, declines were also reported by more than 70 percent of respondents, but the magnitude was more skewed to the single-digit range--with 43 percent saying drops were between 1- and 10 percent, while 19 percent put the drops in the 10-to-20 percent range.

The survey measures premium rate changes across eight additional transportation segments:

o Trucking Operations

o Intermodal Carriers

o Messenger/Courier Services

o School Bus Contractors

o Bulk Transportation

o Airport Ground Transportation

o Specialized Carriers & Riggers

o Limousine Services

Survey results indicated that carriers were better at holding the line on prices in the limousine and airport ground transportation segments, NIP Group said.

Looking at the business by account size, the NIP survey reported bigger price decreases for larger accounts. While only 17 percent of market participants said rates fell 10-to-20 percent for small commercial transportation accounts (less than $75,000 in premium) during the first quarter, nearly 33 percent reported such declines for medium-sized accounts ($75,000 to $250,000).

For large accounts (more than $250,000), 27 percent of survey respondents reported rate declines in the 10-to-20 percent range.

Overall, while 65 percent said small-account rates dropped in the first quarter, more than 80 percent said medium-sized account rates fell and more than 90 percent said large-account rates dropped.

Special Reports /

Transportation Rates Still Dropping, Survey Finds

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