NU Online News Service, Jan. 20, 1:38 p.m. EST
When push comes to shove, commercial insurers would rather keep business than hold pricing or introduce an increase at renewal.
The good news is there may be some signs of an increase in demand.
The Council of Insurance Agents & Brokers said that, in a recent survey, brokers said carriers tried to hold steady or increase price at renewal but “increases didn’t hold where competition was strong.”
At renewal, commercial lines pricing declined 5.4 percent in the fourth quarter, according to The Council’s “Fourth Quarter Commercial P/C Market Index Survey.”
“The fundamentals don’t add up, but competition still rules the day,” said Ken A. Crerar, president of The Council, in a statement. “Buyers still have opportunities to get more coverage at competitive prices.”
Prices at renewals declined 5.2 percent in the third quarter. Holding steady might be good news for an industry segment that saw a 6.4 percent decline in the second quarter 2010.
Brokers told The Council that carriers are being more aggressive on new business than on pricing renewals. Competition is still driving pricing and insurers are giving moderate decreases at renewals to keep retention stable.
Economic and health care reform continues to top the list of concerns for brokers, according to The Council, but 47 percent of survey respondents said they saw an increase in demand. That’s compared to 34 percent last quarter and 24 percent a year ago of brokers that said the same.
Underwriting, brokers said, is “tightening up” and more attention is being paid to loss results.
A majority of industry leaders at the Property/Casualty Insurance Joint Industry Forum this month said they do not expect increases in profits in commercial lines.
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