The latest surveys of rate changes for the group medical and theproperty and casualty insurance markets reveal a tale of two verydifferent markets–with medical rates continuing to climb andp&c prices still falling.

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While rates for renewing group medical benefit accountscontinued to increase in the U.S. market between June and October,brokers reported that clients were not planning to cut coveragealtogether, according to a November survey of insurance brokerspublished by the Council of Insurance Agents & Brokers.

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Separately, Dallas-based MarketScout reported that rates forU.S. property and casualty commercial insurance policies were downan average of 5 percent during November, a slight decrease from thelast several months, which saw declines of 4 percent.

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On the employee benefits side, CIAB's “Employee BenefitsMarket Survey” asked benefit brokers what the average rate ofincrease in premiums on renewal was for group medical and grouplife compared to the last survey in May.

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The vast majority of benefits consultant respondents indicatedincreases from the spring. Eighty-nine percent said pricesincreased for small accounts–those with 50 or fewer employees–withmore than half the increases falling in the 11-20 percentrange.

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For medium accounts–those with 51 to 500 employees–95 percentsaid those accounts experienced increases, with 60 percent seeingincreases in the range of 11-20 percent.

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Group health premium hikes also were reported among largeaccounts–those with 501 or more employees. Sixty-one percent sawincreases in the 6-15 percent range, with 31 percent in the 6-10percent range and 30 percent in the 11-15 percent range.

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On the p&c side, MarketScout reported that competition isincreasing for the large accounts with premiums of $250,000 to $1million. These large accounts are down 6 percent in November,compared to down 5 percent in October.

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For other size categories, MarketScout reported November averagepremium drops of 2 percent for small accounts (up to $25,000), 5percent for medium-sized accounts ($25,001-$250,000), and 5 percentfor jumbo accounts (over $1,000,000).

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By coverage, general liabilitywas down the most at minus-6 percent, followed by commercialproperty with a 5 percent average decline in November, according toMarketScout, which produces a monthly “Market Barometer.”

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“Insurers who traditionally focused on small guaranteed costaccounts are moving into the middle and larger market sectors toget a shot at larger accounts, which many insurance executives feelgenerate a higher profit margin for both insurers andintermediaries,” said Richard Kerr, chief executive officer ofMarketScout.

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Last month, Mr. Kerr said the industry needs to “realizethis pricing environment may be around for several moreyears.”

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Business owners, business interruption, inland marine andumbrella/excess coverages were each down 3 percent. Commercial autoand crime were down 2 percent in November, MarketScoutreported.

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By industry class, manufacturing and contracting were down 5percent each.

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As for group medical business, CIAB members “still saw premiumincreases for their clients, which is frustrating for them,” saidKen A. Crerar, CIAB president.

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“There is no question that the services of brokers have been inhigh demand since the passage of health care reform, and many areconcerned about the lack of flexibility among carriers. There is alot of confusion due to the slow or prolonged implementationschedule.”

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According to the survey, small, medium and large employers havestarted shifting some costs to employees through higher deductiblesand co-pays and increased employee shares of premium costs. Someemployers also limited out-of-network options in an attempt tocontrol the cost of group medical plans.

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The survey indicated that 96 percent of employee benefitsconsultants are “concerned” or “very concerned” that health carereform will negatively impact their group benefits revenue.

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According to CIAB, high increases were reported, particularlyfor medium-sized group medical accounts, across all regions.Increases of 11-15 percent were reported for 38 percent of mediumaccounts in the Northeast; 41 percent of medium accounts in theSoutheast; 71 percent of medium accounts in the Midwest; 79 percentof medium accounts in the Pacific Northwest; and 50 percent ofmedium accounts in the Southwest.

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Most benefits consultants reported little or no change in grouplife insurance renewal rates. For 11 percent of small accounts,rates were down 1-5 percent, but 50 percent of accounts had nochange. For medium accounts, 20 percent were down 1-5 percent, andanother 40 percent reported no change. For large accounts, 19percent were down 6-10 percent and 35 percent reported nochange.

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