Property rates continued to climbin 2012’s second quarter, rising an average 3.1 percent overall and5.3 percent for catastrophe-exposed risks, according to Marsh’slatest Benchmarking Trends report.

But Duncan Ellis, Marsh’s property practice leader, says therate environment is “definitely not a hard market” in thetraditional sense of the word.

Marsh’s analysis states, “This trend of moderate rate increasesis expected to continue for the remainder of 2012 as underwriterscontinue to use catastrophe models and actuarial formulas todetermine pricing and capacity.”

The broker says 61 percent of its accounts saw rate increases inQ2, while 25 percent saw rate reductions. Fourteen percent remainedflat. Marsh notes that clients who increased their deductibles,reduced limits or restructured their programs in order to avoidrate increases were excluded from the analysis, which takes intoaccount all of the broker’s property clients.

While the averages show moderate rate increases, Marsh notesthat loss-driven and heavily cat-exposed accounts experiencedsteeper increases of up to 20 percent or more: “Even considerablycat-exposed U.S. companies without losses generally experiencedincreases between 10 and 20 percent.”

Ellis, in defining exactly what the second-quarter rate movementmeans in terms of overall market direction, says the currentenvironment can be described as a “market in transition aroundrate.” Rates are increasing, he notes, but there is no capacitycrunch that would be expected in a traditional hard market.

Recent reports on reinsurance property pricing have noted thatrate increases that were quite significant in late 2011 have nowmoderated and even flattened out.

Ellis says in the primary-insurance world, prices are stillgoing up, especially on accounts with losses or with cat exposure.But he adds that the rate of increases is “starting to temper alittle bit.”

Ellis says he expects the rate of uplift to moderate, if notflatten, through the third and fourth quarters this year.