Posted on 10 Nov 2009
In Monday's edition of the "Daily NewsFlash", we looked at various views and opinions of where the Property/Casualty industry is heading. Some see the market beginning to harden by mid 2010; others see the marketing remaining soft throughout the next year. This week MarketScout released data showing that the composite rate for US Property/Casualty coverages reversed direction in October 2009, signaling a rate reduction of 5% as compared to a reduction of 4% for October 2009, breaking the "moderation trend."
Richard Kerr, CEO of MarketScout, profiled the rate reversal by stating, "The US Property/Casualty market is still soft; however, rates had been progressively moderating for the last 21 months, trending from a reduction of minus 15% in January 2008 to minus 4% in October 2009. During this period there were no reversals in the composite rate. For 21 months, the Market Barometer has consistently measured rates either down, or at least flat on a month-to-month comparison As a result, insurance companies and intermediaries have been anxiously awaiting a month where we report the composite rate as zero with most insurance policies renewing "as expiring." The October rate reversal does not bode well for those looking forward to the end of the soft market. But, maybe October was an anomaly maybe.
General Liability, Property, Inland Marine, Umbrella and EPLI rates were all down even more in October than in October. By industry class, Manufacturing accounts experienced the most aggressive rate reductions, down 6%.
The National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout's analysis of market conditions.