Lack of underwriting discipline in commercial P&C industry: CIAB survey

Commercial property-casualty insurance rates continued their free-fall during 2007 Q2 in a marketplace environment described as totally unpredictable in terms of pricing and underwriting, according to a commercial market index survey by U.S.s Council of Insurance Agents & Brokers (CIAB).
Brokers handling earthquake coverage in California or wind coverage in the Gulf and East Coasts aside, premiums for the vast majority of commercial accounts of all sizes were down significantly from 2007 Q1, a CIAB release says.
A Lehman Brothers analysis of the CIABs survey data said the average drop in premium rates for all sizes of accounts was 11.8% in Q2 – small account premium rates were down by an average of 8.3%, medium accounts, on average, saw a drop of 12.6%, and large accounts rates decreased by 14.5%.
One broker commented in the survey that the current environment was the, softest market and most relaxed underwriting Ive seen since the early 1980s, the CIAB release says.
In some cases, the participants reported, carriers were trying to preserve premium by offering lower deductibles, additional coverage and increased limits, the CIAB release notes, adding that, others were aggressively seeking new business, including underwriting with little information on the account and quoting without loss runs.