The seemingly endlessly ballyhooed soft market continues to linger for the property/casualty industry. In November, the composite rate for P&C placements in the United States was -5%, according to research from MarketScout. The previous three months showed a composite decline of -4%.

“Our studies reflect increased competition for accounts ranging in premium size from $250,000 to $1 million," says Richard Kerr, MarketScout's founder and CEO. "Insurers who traditionally focused on small guaranteed cost accounts are moving into the middle and larger market sectors to get a shot at larger accounts which many insurance executives feel generate a higher profit margin for both insurers and intermediaries. Insurers collect more premium and agents normally get full commissions.

"Further, the agents benefit by direct communication with officers of the insured and absence of fee negotiations," Kerr continues. "Mega brokers continue to work on implementing successful guaranteed cost market strategies, resulting in lower premiums for insurers and possibly lower commissions for agents in the future.”

MarketScout found that by coverage, general liability (-6%) was down the most, followed by property (-5%). When gauged by account size, accounts from $250,000 to $1 million were priced most aggressively at -6%, and when measured by industry class, manufacturing and contracting were both down 5%.

A summary of the November 2010 rates by coverage, industry class and account size is set forth below:

Coverage Class

Commercial Property — Down 5%

Business Interruption — Down 3%

BOP — Down 3%

Inland Marine — Down 3%

General Liability — Down 6%

Umbrella/Excess — Down 3%

Commercial Auto — Down 2%

Workers’ Compensation — Down 1%

Professional Liability — Down 1%

D&O Liability — Down 1%

EPLI — Down 2%

Fiduciary — Down 1%

Crime — Down 2%

Surety — Down 1%

 

Account Size

Small Accounts (Up to $25,000) — Down 2%

Medium Accounts ($25,001 – $250,000) — Down 5%

Large Accounts ($250,001 – $1,000,000) — Down 6%

Jumbo Accounts (Over $1,000,000) — Down 5%

 

Industry Class

Manufacturing — Down 5%

Contracting — Down 5%

Service — Down 5%

Habitational — Down 3%

Public Entity — Down 2%

Transportation — Down 2%

Energy — Down 2% 

 

 

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Corrected December 8, 2010 at 12:05PM: yes