NU Online News Service, June 6, 3:04 p.m. EDT

Despite market conditions that should be edging pricing up, the U.S. property and casualty market still remains soft with composite rates in May running at minus-4 percent, according to the online insurance exchange MarketScout.

The Dallas-based company's monthly market indicator now has rates at minus-4 percent for the last two months. Prior to April the barometer held steady at minus-5 percent for four months.

Richard Kerr, CEO for the company, says in a statement, “Financial and economic metrics may support a market turn, but real-life situations have a considerable influence on the actual pricing set forth by underwriters.”

By coverage class, inland marine and general liability were the softest lines at minus-3 percent. The most stable were professional, directors and officers liability, employment practices and crime, which were flat.

MarketScout May 2011 Barometer Large accounts (risks with $250,001 to $1 million in premium) were the softest at minus-5 percent. On small accounts (up to $25,000 in premium), premium pricing was flat. Jumbo accounts (over $1 million in premium) were at minus-4 percent, and medium-size accounts (premium of $25,001 to $250,000) stood at minus-3 percent.

In an analyst's note, Meyer Shields of Stifel Nicolaus says for the carriers, rates are going in the right direction, noting that four lines are showing no decrease in price direction. He says the slight change in pricing direction is primarily due to the deterioration in carrier results as “reserved development tailwinds subside.”

In his analysis, he was more bullish on personal-lines insurers, where he says carriers are getting rate increases. He also feels insurance brokers would benefit from a turnaround in the market, as they would be able to enjoy some organic growth.

In the future, Kerr says MarketScout would seek to highlight pricing in an insurance group. For this month's report, he touches on the energy sector where he says there is a “pricing war” between “two large insurers.”

“Underwriters from each company have realigned and egos are involved,” he says.

The underwriters, he went on to say, are involved in grabbing as much market share from the other in an effort to offset losses and get the other to “finally surrender.”

The market is further complicated by a new entrant that is actively underpricing that sector's risk.

According to the barometer, energy is showing the steepest decline, down 6 percent.

Special Reports /

MarketScout: May P&C Market Decline At 4 Percent

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