The downward spiral of commercial insurance rates showed signs of bottoming out last month with a 14 percent composite decrease–one point less than in January and two below December 2007.
"Premium reductions are strongest in the service contractor industry group," said Richard Kerr, founder and chief executive officer of MarketScout, a Dallas-based online insurance exchange that produces the monthly barometer. "General liability coverage for a service contractor with total premiums of $25,000 to $100,000 is the most price-competitive segment of the U.S. [property-casualty] markets."
He added that "rate reductions are moderating in a select group of industries and coverages–in particular, oil and gas contractors are not seeing price reductions as dramatic as what they enjoyed in 2007."
He also observed "many state-mandated workers' compensation rate reductions were implemented in 2007, so premium reductions should moderate in 2008 unless insurers begin to aggressively apply credits, thereby reducing the ultimate premium."
Commercial property was down 17 percent–the largest decline of 13 classes listed. Business interruption and general liability were not far behind with a 16 percent decline. Workers' comp, fiduciary and crime had the smallest drop at 8 percent.
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