Property and casualty rate reductions deepened slightly in August overall, but in general have stabilized over the past 12 months, according to the latest “barometer” survey results from MarketScout.

In its monthly “Market Barometer” report, MarketScout said the composite rate for p&c placements in the United States was down 4 percent for August 2010, compared to a 5 percent reduction in August 2009.

Rate cuts were deeper in August than they were in July, when the barometer indicated a 3 percent decline. But MarketScout noted that the volume of business placed in August is “considerably smaller than in most other months.”

Looking at the bigger picture, Richard Kerr, founder and chief executive officer of MarketScout, noted that “beginning in August of 2009, the composite p&c rate has been drifting between minus-5 percent and minus-3 percent–a very narrow range as compared to the wide swings during the last several years.”

He added that “no doubt, rate reductions continue, but over the last year the degree of reductions has definitely moderated.”

From a buyer's perspective, bigger is still better, as large accounts, defined as premiums from $250,001 to $1 million, saw the biggest rate decreases of 5 percent. Jumbo accounts, with premium over $1 million, and medium accounts, with premium from $25,001 to $250,000, both saw 4 percent decreases.

However, rates for small accounts were only down 3 percent.

By coverage class, general liability led the way for rate decreases at 6 percent. Commercial property was down 4 percent, while inland marine, commercial auto and workers' compensation were all down 3 percent.

Business interruption, businessowners policies, umbrella/excess, directors and officers liability, employment practices liability, and surety were down 2 percent, while professional liability, fiduciary and crime were down 1 percent.

With respect to industry class, MarketScout said the service industry saw the greatest rate reductions at 5 percent, followed by manufacturing at 4 percent.

Contracting, habitational and transportation saw 3 percent decreases, while public entities and energy rates were down 2 percent.

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.”

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 actual findings, which are mathematically driven by new and renewal placements across the United States,” the firm noted.

Special Reports /

P&C Rates Continue Decline, But Remain Within Slim Range

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