Major Insurers Lead Market Turn

The composite rate for property and casualty insurance was minus 8% for February 2009 as compared to minus 14% in February 2008. Richard Kerr, Founder and CEO of MarketScout outlined the February results, “A slow moderation in rate decreases continues as insurers evaluate their 2008 results and the impact of a slowing economy in 2009. Rate increases are merited based upon 2008 underwriting results and the reduction in premium income due to lower exposures such as payrolls and gross receipts. Four large insurance companies are drawing a line in the sand and demanding rate stabilization. If it sticks, we will see a further flattening of reductions very soon.”

General Liability (GL) and Business Owners policies (BOP) reflected the highest rate reductions at 9%. Other lines of coverage experienced rate reductions of 4% to 7% but the composite reduction was 8% because of the large volume of GL and BOP business. By account size, premium reductions were at similar levels with the only notable feature being a slightly smaller reduction for accounts under $250,000 premium. Service and Manufacturing accounts enjoyed the greatest premium reductions (9%) while Transportation and Energy the least (5%).

A summary of rates for each coverage and industry class as well as by account size is available for each month  For February 2009, the rates were as follows:

Market Scout corroborates its data by working with The National Alliance for Insurance Education and Research to conduct in person surveys. These surveys are conducted every month during CIC, CRM and other advanced learning sessions where the participants are relaxed and have ample time to thoroughly complete the survey.

MarketScout

The barometer is compiled by MarketScout, a Dallas, Texas based electronic insurance exchange which underwrites and distributes hundreds of product lines to its over 35,000-member agency network across the United States.