Canadian Underwriter

CIAB 3-Q survey shows improved U.S. commercial conditions

October 23, 2003   by Canadian Underwriter

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The latest “commercial market index” membership survey conducted by the U.S.-based Council of Insurance Agents & Brokers (CIAB) suggests that during the third quarter of this year there was a renewed sense of market competition among property and casualty insurers in terms of pricing in several lines of commercial coverage. Broker membership feedback also indicates that during the quarter premium rates for commercial property coverages either “flattened” or were renewed at lower rates. The CIAB membership represents insurance brokers accounting for about 80% of total p&c commercial insurance premiums for the U.S. market, a statement released by the council notes.
The CIAB’s third quarter market pricing index points to an easing of coverage rates for all size accounts across the U.S. Notably, nearly one-third of small and large accounts saw either no change in premium on coverage renewal or gained a decrease of up to 10% on rates, the council reports. The percentage of medium-sized accounts experiencing similarly favorable conditions was slightly lower at 27%, according to the index results. Overall, the index reveals that premiums for 40% of all size of accounts rose by between 1%-10% during the third quarter of this year.
The move toward “softer rates” in the current marketplace is not surprising, observes the CIAB’s president Ken Crerar. However, he notes that several factors remain in play which suggest that the U.S. p&c commercial insurance marketplace is unlikely to experience rapid price reduction in the immediate future. These include the current weak U.S. economic conditions combined with the ongoing financial pressures suffered by p&c insurers through low investment yields and the need to strengthen capital reserves.

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