The beginning of 2011 was much like the end of 2010 for the soft market, as rates continued to decrease moderately, according to MarketScout's monthly barometer.

For the third month in a row, average property and casualty rates decreased 5 percent, even though one segment of the market did not see as sharp a decrease as other segments.

“Underwriters on small accounts, those under $25,000 [premium], are not pricing nearly as aggressively as large account underwriters,” said Richard Kerr, chief executive officer of the Dallas-based electronic insurance exchange in a statement. “Small account rate reductions were down only 1 percent, while accounts paying a premium over $1 million enjoyed rate reductions averaging 6 percent.”

Over the past three months, small accounts have been the least competitive of accounts, with November showing a decrease of 2 percent and December down 3 percent.

Larger accounts have shown decreases of around 5 to 6 percent over the past three months.

Both medium-size accounts (with premium between $25,001 and $250,000) and large accounts ($250,001-$1 million in premium) experienced decreases of 5 percent.

By coverage class, property had the sharpest drop for the third month in a row. General liability was also down 5 percent, slightly off its 6 percent decrease for the previous two months.

No class of business witnessed rate increases, but workers' compensation, professional liability, directors and officers liability, employers professional liability insurance, fiduciary and surety were all down just 1 percent.

Turning to industry class, manufacturing and service were down 5 percent, while energy was down 4 percent. The other four coverage classes listed—contracting, habitational, public entity and transportation—were all down 3 percent in the month.

Of the seven industry classes, manufacturing and service have remained consistent at 5 percent down over the past three months.

Contracting has seen a gradual change from down 5 percent in November to down 3 percent in January.

Energy has softened a bit, going from down 2 percent in November and December to down 4 percent in January.

In an financial analyst's note, Meyer Shields with Stifel Nicolaus said while rate hardening is not occurring yet, the recent stabilization “indicates that carriers don't have significant wiggle room left” on premium pricing. He said as “fading reserve releases” compress margins, there should be appreciable upward momentum in rates by mid-2012.

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