MarketScout Notes More Rate Declines

Premium rates charged for commercial property insurance dropped 14 percent in July compared to a year ago, part of a general soft market trend for commercial insurance, an electronic insurance exchange reported.

Dallas-based MarketScout also said that other sectors with double-digit declines from July a year ago were general liability, umbrella/excess, employment practices liability, and crime insurance coverage.

At the same time, rate decreases in commercial insurance categories in general are starting to moderate, down 11 percent from June 2007, as compared to a 14 percent reduction in July 2007, the MarketScout report said.

For example, declines in commercial property, general liability, auto and workers' compensation rates moderated in July, while slight increases were recorded in umbrella/excess, professional, directors and officers liability, crime and surety insurance rates.

But Richard Kerr, chairman and chief executive officer of MarketScout, cautioned that the collapse of subprime mortgage investments continues to create concerns despite massive equity write-downs by major insurers.

He said that while these losses are not directly related to insurance underwriting results, “they ultimately will impact insurers' appetite to continue rate cuts.”