NU Online News Service, May 4, 3:30 p.m. EDT
Soft-market rate declines are beginning to ease, as some lines are exhibiting signs of flattening or modestly increasing, says The Council of Insurance Agents & Brokers.
The Council released its quarterly market survey report of insurance broker members, which states that the average rate of decline for commercial-lines renewal pricing was 2.9 percent during the 2011 first quarter, compared to a rate of decline of 5.4 percent in the 2010 fourth quarter.
"It's too early to tell if the leveling off and modest price increases were a result of the fallout from the recent Japan disaster and other catastrophes earlier this year, or if the market is reacting to broader market conditions," says Ken A. Crerar, president of The Council, in a statement.
Breaking down the survey results into small, midsize and large accounts, there appears to be a notable difference on a quarter-to-quarter basis.
Small accounts showed an average rate decline of 1.3 percent for the first quarter. From the 2010 first quarter through the fourth quarter, rates were in decline more than 3 percent.
Midsize accounts averaged a decline of 2.9 percent for the first three months of the year, compared to 5.6 percent for the 2010 fourth quarter. Rates declined at around 5.6 percent for all quarters in 2010 except the second quarter, when rates declined 7 percent.
Large accounts declined at a rate of 4.4 percent for the 2011 first quarter, compared to a decline of 6.7 percent for the 2010 fourth quarter. Declines were less consistent in 2010 for large accounts, declining at a rate of 6.6 percent during the third quarter, 8.9 percent during the second quarter and 7.4 percent in the first quarter.
The Council says the survey indicates a slow economic improvement as demand for commercial products continues to pick up. The association says 57 percent of respondents saw an increase in demand compared to 47 percent in the previous quarter's report.
Examining the breakdown of business, commercial property and workers' compensation had the greatest percentage of brokers saying they have seen demand increases.
Twenty-two percent of brokers say workers' comp rates rose 1-10 percent, while 1 percent says it rose 10-20 percent. Twenty-three percent say they saw no change, while 28 percent say rates declined 1-20 percent.
Concerning commercial property, 21 percent of brokers say rates rose 1-10 percent, while 23 percent saw no change and 29 percent say rates were down 1-10 percent.
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