Commercial Pricing Hits Floor

The decline in commercial lines pricing moderated somewhat in April, according to the latest “barometer” from MarketScout.

April 2006 rates were down 5 percent on a composite basis, compared with 6 percent in March. Richard Kerr, chairman of the Dallas-based insurance exchange, said pricing for energy and property risks moderated slightly.

“The property market outside of coastal exposures in the Gulf and up the Eastern seaboard is relatively stable,” he said. “With the pending wind season upon us, however, property accounts in wind areas continue to be unstable.”

He added that April rates “reversed direction a bit as a result of corrections in most lines, including the general and professional liability markets,” with both falling two points less than the preceding month.

By coverage class, umbrella/excess showed the sharpest decline at 7 percent, followed by general and professional liability risk, both at 6 percent.

Workers' compensation declined by 5 percent, while commercial property, employment practices liability insurance, surety and fiduciary liability remained flat.

Large accounts posting between $250,000 and $1 million in premium showed the largest decline at 9 percent, followed by accounts of more than $1 million in premium, which showed an 8 percent dip in pricing.

By industry class, service showed the largest decline at 7 percent, while the energy sector had to pay 8 percent more coverage last month.