P-C Rate Declines Ease Up

The decline of property-casualty insurance rates slowed modestly in February, but the market remains relatively soft, according to MarketScout, the Dallas-based electronic insurance exchange. The firm's monthly “Market Barometer” survey found a 5 percent average reduction in rates last month, down from 6 percent in January.

“February is a traditionally slow month for insurance placements,” said Richard Kerr, chairman and CEO of MarketScout. “The volume of business placed in February is small, so the slight hardening trend may reverse in March.”

He noted, however, that last month energy and jumbo accounts hardened, while umbrella and excess liability accounts softened. The overall market is still generating a composite rate reduction, but the trend of decreasing rates reversed a bit in February, he added.

MarketScout said energy accounts appear to be the only industry sector where underwriters are spreading the cost of hurricane claims across the market. Offshore accounts continue to encounter rate hikes of 20-to-50 percent, although the composite increase on the entire energy book is only 11 percent because of the larger volume of onshore (with hikes averaging about 8 percent) versus offshore business, MarketScout explained.

The softening market for jumbo accounts also firmed up last month, with rates for big buyers down 9 percent, versus 12 percent in January. MarketScout said this may be an aberration, or be skewed by coastal property exposures, which saw average rate increases of 3 percent.