NU Online News Service
U.S. commercial property and casualty insurance premiums and corresponding rates were down 4 percent last month, but an uptick is coming for energy rates, an insurance exchange executive predicted.
"Energy premiums are going to increase, especially for offshore accounts," said Richard Kerr, chief executive officer of the Dallas-based electronic exchange MarketScout.
He added that, "The disaster suffered by British Petroleum in the Gulf of Mexico is huge and will have an immediate impact on all offshore energy placements."
Mr. Kerr remarked that while British Petroleum is largely self-insured, "energy underwriters across the globe will participate in this loss via either excess placements, insurance on the non-operators (investors), drilling contractor or blowout prevention manufacturer."
Further, he said, "The non-operators, Anadarko and Matsui Oil, have extensive insurance placements, as does the drilling contractor, Transocean. It may take years to calculate the total insured loss from this disaster but premiums will increase immediately for offshore energy accounts."
And Mr. Kerr noted that, "even though onshore insureds may feel they should not suffer because of offshore losses, they too could be impacted. Many onshore insurers have some offshore exposure and may try to capture rate increases across the board."
Regarding rates for the past month, MarketScout said by coverage class the biggest declines were for general liability, which was down 6 percent, followed by commercial property down 4 percent.
A 3 percent decrease was recorded for business interruption inland marine, umbrella/excess, commercial auto and workers' compensation coverage.
Business owners policies and professional liability were down 2 percent while a 1 percent decrease was listed for directors and officers liability, employment practices liability, fiduciary, crime and surety.
By account size the biggest drop was for Jumbo accounts over $1 million at 6 percent followed by 5 percent for large accounts from $250,001 to $1 million, 4 percent for medium accounts of $25,001 to $250,000 and 3 percent for small accounts up to $25,000.
Among industry classes the largest reductions were in the service sector at 5 percent. Manufacturing and contracting rates were down 4 percent followed by hatitational, public entity and transportation at 3 percent. Energy rates were down 2 percent.
MarketScout said the National Alliance for Insurance Education and Research conducted pricing surveys used in its analysis of market conditions and the surveys help to further corroborate MarketScout's actual findings, which are mathematically driven by actual new and renewal placements across the United States.
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