July property and casualty rates declined an average of 3 percent compared to last year at the same time, due in part to favorable midyear reinsurance terms, according to the latest survey by MarketScout.

In its monthly “Market Barometer” report, MarketScout said commercial insurance rates are expected to be soft overall for the remainder of the year, barring a major catastrophic event.

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

He predicted that “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, dropping an average of 5 percent. On the other end of the spectrum, rates for crime coverage were flat.

Commercial property and business-owners policies decreased 4 percent each, while business interruption, inland marine, commercial auto and workers' compensation all declined by 3 percent.

Umbrella/excess and fiduciary rates decreased 2 percent, while professional liability, directors and officers liability, and surety all decreased 1 percent.

Larger accounts tended to get greater rate decreases, according to MarketScout, with “jumbo” accounts (over $1 million in premium) and “large” accounts ($250,000 to $1 million) each seeing rates in general decline by 4 percent. Medium-size accounts declined 3 percent, while small accounts (with premiums up to $25,000) decreased 2 percent.

Rates for risks in the services industry were down 4 percent, while manufacturing, contracting and public entity risks were all down 3 percent. Habitational, transportation and energy risks all declined 2 percent.

The National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout's analysis of market conditions. “These surveys help to further corroborate MarketScout's findings, mathematically driven by new and renewal placements across the United States,” the Dallas-based firm explained.

MarketScout is an electronic insurance exchange that “underwrites and distributes hundreds of product lines to over 35,000 agency network members across the United States,” the firm noted, adding that “over 50 'A'-rated carriers participate in the MarketScout exchange platform at www.marketscout.com.”

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Favorable Midyear Reinsurance Terms Drive July&#039;s 3 Percent Rate Decrease

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Favorable Midyear Reinsurance Terms Drive July's 3 Percent Rate Decrease