A pair of surveys about the commercial lines insurance market in the 2010 third quarter revealed that competition remains fierce and that the soft market is still far from over.
In a Council of Insurance Agents and Brokers survey, brokers in all regions of the United States agreed that the commercial property and casualty market remains competitive, particularly for new business, and that insurers are still willing to "reduce premiums significantly."
The survey showed that renewal rates for commercial risks declined by 5.2 percent on average, CIAB said, compared to a 6.4 percent decrease in the second quarter.
Rates for large accounts declined 6.6 percent, midsize accounts declined 5.5 percent, and small accounts declined 3.6 percent, according to the survey results.
Meanwhile, a Risk and Insurance Management Society survey, administered by New York-based Advisen, revealed that the biggest drop in average premium was 4 percent for directors and officers policies. Property insurance premiums declined 3 percent, and general liability and workers' compensation fell less than 1 percent.
While both surveys showed premiums declining less in the 2010 third quarter compared to the second quarter, analyses of the surveys concluded that the soft market is still going strong.
"If insurers avoid large losses this hurricane season, which seems likely at this point, competition may pick up across all lines," said Dave Bradford, executive vice president of Advisen Ltd. "There is still too much capacity chasing too little premium."
CIAB President Ken A. Crerar said, "Market conditions haven't changed much since last quarter. Carriers are still willing to compete on terms, conditions and price. Barring any unforeseen events, there is nothing on the immediate horizon that suggests a dramatic change in the market's direction."
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