July 22, 2004 by Canadian Underwriter
U.S. commercial property and casualty insurance rates continued to decline in the second quarter of this year across the various business size segments of the marketplace, according to the latest quarterly broker member survey conducted by the Council of Insurance Agents & Brokers (CIAB). As a result, CIAB members once again highlighted rapid price weakening as being their biggest concern.
The CIAB survey indicates that 36 of small commercial accounts, 57% of medium-sized accounts and 53% of large accounts experienced rate decreases of up to 20%. A relatively small number of small commercial accounts attracted upward rate adjustments of between 1%-10%, the council observes.
Overall, small commercial accounts saw rates decline by about 1%, medium-sized account rates dropped about 3% and large accounts saw rates fall by 6% on average. "Terms and conditions are still tight, but we are seeing accelerated decreases in premium rates and a return of competition to the market. The questions now are how far and how fast will those rates come down. There are some mitigating factors such as [insurer] reserve levels and the overall economic recovery that could serve as brakes on the market," says Ken Crerar, president of the council.