NU Online News Service, Oct. 19, 1:34 p.m. EDT
Property and casualty insurance brokers say prices edged up slightly during the third quarter of this year, with small accounts experiencing the largest increase, says the Council of Insurance Agents & Brokers.
In its quarterly survey of the association's members, the Council says brokers reported commercial-insurance rates rose less than 1 percent on average.
"We really didn't see any significant trend last quarter, though rates appear to be edging towards positive territory," says Ken A. Crerar, president of the Council in a statement. "There's still plenty of capacity in the market to dampen prices."
The survey says third-quarter rates for small accounts edged up the most at slightly more than 2 percent. Medium accounts were up just over 1 percent, while large accounts were down by less than 1 percent.
When asked how premium rates have changed from July through September, 38 percent of brokers say they saw no change in small-business accounts, while 11 percent say rates were down 1-10 percent. 42 percent say rates rose 1-10 percent.
Examining medium-size accounts (commission and fees between $25,000 and $100,000), 26 percent of brokers say there was no change, while 24 percent say rates dropped 1-10 percent and 39 percent say rates increased 1-10 percent.
For large accounts, 30 percent of brokers say there was no change in rates. Twenty-nine percent say rates were down 1-10 percent and 28 percent rates rose 1-10 percent.
Of the 10 lines of business the Council says experienced positive rate change, workers' compensation had the sharpest increase at more than 4 percent, followed by commercial property at 3 percent.
Business interruption was next at just less than 2 percent. Umbrella and employment practices came in at just over 1 percent increases. The other remaining lines stood at less than 1 percent.
In anecdotal comments from brokers replying to the survey, the Council says brokers are finding that carriers are paying closer attention to underwriting and are walking away from business they feel that the cannot adequately underwriter or get an increase on at renewal.
The comments suggest that carriers are paying close attention to workers' compensation and property lines of business, reducing limits in some cases while increasing rates.
However, demand for insurance "appears to be flat," the Council says, with 39 percent of brokers saying demand has not picked up, the same number as last quarter's survey.
"The economy and market competition are still keeping brokers awake at night," the Council says.
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