Hurricane Losses Put
Damper On Soft Market
While massive hurricane claims have not yet had a major effect on insurance pricing, property-casualty rate cuts on average slowed down to 5 percent last month, compared to 6 percent in August, according to a survey by MarketScout.com
"Hurricanes Katrina and Rita did not dramatically impact the p-c market in September. However, we do expect a significant impact on coastal property and offshore energy rates from October 2005 forward," said Richard Kerr, CEO of the Dallas-based online insurance exchange.
"In fact, we project an increase of 50 percent on offshore energy accounts with operations in the Gulf of Mexico, and 20 percent on U.S. coastal property located within 25 miles of the Gulf of Mexico or Atlantic Ocean," he said.
These hikes, he added, "will impact the total p-c composite rate. However, those offshore energy and coastal property classes account for a relatively small percentage of the total market. Thus, the overall rate change will be somewhat mitigated because we do not expect the hurricanes to significantly impact the rating structure of non-coastal properties or other classes of business. We expect no impact to liability rates."
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