NU Online News Service, Nov. 7, 11:33 a.m.EDT

Further evidence of the soft market making a turnaround wasfurnished Friday with the release of the MarketScout's Octoberbarometer that indicates average rate increases/decreases were flatfor the month.

“October results affirm the soft market is drawing to a close,”says Richard Kerr, chief executive officer of MarketScout, theDallas-based electronic insurance exchange. “With two consecutivemonths of a flat market, we are on the cusp of a composite rateincrease.”

Kerr notes that according to October's MarketScout figures, onlyumbrella liability and public entities recorded rate decreases, of1 percent.

Business interruption, inland marine, general liability,commercial auto, professional liability, fiduciary and crime wereflat.

Businessowners policy, directors and officers liability,employers professional liability insurance and surety were all up 1percent, while workers' compensation was up 2 percent.

By account size, small accounts were up 2 percent and mediumaccounts ($25,011 – $250,000 in premium) were up 1 percent. Largeaccounts and jumbo accounts (over $1 million in premium) were bothflat.

Reviewing the seven industry classes listed in the survey,transportation was up the most at 3 percent, followed by energy at2 percent, and habitational and contracting at 1 percent.Manufacturing and service were both flat, while public entity wasdown 1 percent.

The report follows the Council of Insurance Agents & Brokersquarterly market survey of insurance brokers, which says averagerate increases during the third quarter were just shy of onepercent or just about flat.

Meyer Shields, a financial analyst for Stifel Nicolaus, saysinsurers' deteriorating calendar-year results are the primarycatalyst for the pricing change, and he adds that the current trendshould accelerate as favorable reserve development tailwindssubside.

He gives high marks to personal-lines insurers who are keepingrates at or above “loss cost inflation rates,” supporting “steadyor improving underwriting profits (dependent on the weather).”

Shields also gives insurance brokers a vote of confidence,saying that the headwinds toward organic growth, recessionarypressures and soft market declines are diminishing, which shouldlead to improvements in their bottom lines.

The MarketScout survey is done in conjunction with the NationalAlliance for Insurance Education and research that conducts pricingsurveys.