NU Online News Service

July property and casualty rates declined an average of three percent compared to last year at the same time due in part to favorable midyear reinsruance terms, according to MarketScout.

In its monthly rate barometer, MarketScout said rates are expected to be soft overall for the remainder of the year, barring a major catastrophic event.

Richard Kerr, founder and CEO of MarketScout, said, "Insurers received just what they needed to continue aggressive pricing for the balance of the year--favorable midyear reinsurance terms."

He added, "Rates will continue to moderate in select coverages or industries, but the composite rate will most likely continue to show a small reduction from the immediately preceding year."

MarketScout reported that general liability rates decreased more than all other coverage classes, at five percent. On the other end of the spectrum, rates for crime were flat. Commercial property and BOP decreased four percent each, and business interruption, inland marine, commercial auto and workers compensation all declined three percent. Umbrella/excess and fiduciary rates decreased 2 percent, while professional liability, directors and officers liabilty and surety all decreased 1 percent.

Larger accounts tended to have greater rate decreases, according to MarketScout, with Jumbo accounts (over $1 million in premium) and large accounts ($250,000 to $1 million) each declining four percent. Medium accounts declined three percent, while small accounts, with premiums up to $25,000, decreased two percent.

Rates for risks in the service industry were down 4 percent, while manufacturing, contracting and public entity risks were all down three percent. Habitational, transportation and energy risks all declined two percent.

Special Reports /

Favorable Reinsurance Terms Drive July Rate Decrease

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