A pricing decline of 9 percent for umbrella/excess coverage last month was the most dramatic figure in the May MarketScout P&C Barometer, which posted a composite decrease three points lower for all insurance sectors.
The Dallas-based electronic insurance exchange reported commercial property pricing rose 2 percent.
MarketScout Chairman Richard Kerr said that figure may seem slight compared to some price rises in the Gulf and other coastal areas. "You have to remember Florida has about $2 trillion worth of property, but that is compared to $180 trillion in the entire nation," he said.
Workers' compensation pricing dropped 7 percent in May, which Mr. Kerr termed significant. "Not only do you have new legislation and regulations passing favorable to the industry, but this also has prompted a number of regional carriers getting back into the market."
General liability pricing declined 6 percent, while the only other line to show an increase was business income, rising 1 percent.
By account size, the ones writing over $1 million in premium, classified as "jumbo" by MarketScout, showed the sharpest decline at 9 percent, while the smallest decline of 6 percent was registered for those accounts posting up to $25,000 in annual premium.
Once again, energy showed the largest price hike in the industry class category of 9 percent, while manufacturing showed the sharpest decline at 7 percent.
Mr. Kerr said perceptions of market pricing swings can depend on who is surveyed. "Retail agents generally lament about a soft market very quickly, while insurance company executives often try to support a steady or hardening market long after the market actually has turned soft," Mr. Kerr said.
Mr. Kerr asserted that competitive bidding can lead to lower pricing but only if agents and insureds do not abuse the process, which he feels is seeking new bids more than once every three years.
About one in 12 accounts are bid each year, Mr. Kerr estimated, which if that number was quadrupled, the May composite rate decrease would have been "dramatically larger than 6 percent."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.