Intense competition and capital overabundance define U.S. commercial insurance market in 2010 Q3: Marsh

Intense competition and overabundance of capacity continue to define the U.S. commercial insurance market, Marsh says in its report, U.S. Insurance Market Report 2010, Third Quarter Update: Insureds Net Benefits as Downward Rate Pressures Persist.
Marsh’s report found that property rates declined an average of 6.1%, general liability rates declined an average of 6.7%, auto liability rates declined an average of 0.1% and directors & officers liability (D&O) rates declined an average of 8.7%.
“Commercial insureds continue to experience favorable market conditions as competition among insurers remains high and capacity plentiful,” said Joe McSweeny, president of Marsh’s United States and Canada division. “A surplus of capacity, continued profits for insurers and a stable litigation environment should lead to continued stability in the fourth quarter of 2010 and into 2011.”
Marsh’s report found that despite an estimated $18 billion in worldwide insured catastrophe losses in the first two quarters of 2010, property rates for domestic and global businesses purchasing insurance in the United States typically declined 5% to 10% in the third quarter. “Barring some unforeseen event, the property market’s abundance of capacity will likely impel insurers to further decrease rates into 2011 in order to maintain market share,” Marsh reports.