CIAB Survey Charts Continued Rate Slide

Commercial property-casualty rates continue their slide with few lines except for property catastrophe risks showing any sign of hardening in the first quarter, the Council of Insurance Agents & Brokers said.

The Washington, D.C.-based association's view is based on its quarterly industry survey of member insurance brokers. A total of 105 brokers responded to the survey covering the first three months of 2006.

The survey found that most brokers see p-c rates either stable or edging downward, continuing 2005's trend in pricing.

CIAB said that based on reports from its brokers, property catastrophe exposures are seeing increases of more than 25 percent and that Florida property capacity is limited. Coastal wind capacity is quickly drying up, the association added.

By account size, rates dropped 1-to-10 percent for 37 percent of small accounts of less than $25,000 in commission and fees; 45 percent for medium-size accounts of between $25,000 and $100,000 in commission and fees; and 40 percent for large accounts of over $100,000 in commission and fees. The decreases were not significantly different from the 2005 fourth-quarter survey.

However, 16 percent of small accounts saw no change in pricing in the first quarter of 2006, compared to 31 percent of accounts seeing no change in the fourth quarter of 2005. There was no quarter-to-quarter change for medium-size (10 percent) and large accounts (9 percent) reporting no change in pricing.

The first-quarter report also appeared to indicate that overall percentage of increases, which ranged from 1-to-100 percent, did not substantially change from the fourth quarter of 2005.

Average commercial rates showed a decrease of 2.7 percent, according to the survey, compared with a 4.6 percent decrease in the fourth quarter of 2005.

Of the five lines of business showing the most changes, the survey said commercial property rates increased 2.3 percent, while workers' compensation had the largest decrease at 7.9 percent. General liability decreased 5.3 percent; umbrella was down 4.1 percent; commercial auto decreased 4 percent.

The complete report is available online at www.ciab.com.