MarketScout: Jan. P-C Rate Hike Slows To 1%

MarketScout: Jan. P-C Rate Hike Slows To 1%

NU Online News Service, Feb. 8, 2:02 p.m. EST?Property-casualty rate increases are continuing a downward trend, with the January price hike level registering at only one percent, according to MarketScout.com, an online insurance exchange.[@@]

The Dallas-based MarketScout also noted, however, that the impact of rate cuts felt by insurers won't be so dramatic. The firm speculated that getting rid of some of the brokers' controversial incentive compensations will offset rate cuts.

The one percent average increase in January is a slight decline from the previous month, when MarketScout said the rate hike for Dec. 2004 came in at two percent.

In a year-over-year comparison, the one percent increase last month is far from the 11 percent raise reported one year ago during Jan. 2004, which itself was a slowdown compared to the 27 percent reported in Jan. 2003.

MarketScout Chief Executive Officer Richard Kerr observed that the market is continuing its downward trend, but said while the "ultimate impact" of rate reductions will be felt by insurers, it won't be as dramatic as first anticipated.

Mr. Kerr said eliminating brokers' incentive compensation that insurers were paying will offset rate reductions, and that some?but not all?insurers will pass these savings on to the ultimate consumer.