Commercial premiums flattening, say U.S. brokers

The latest survey of U.S. commercial agents and brokers show property and casualty rates are flattening, says the Council of Insurance Agents and Brokers (CIAB), releasing its second quarter 2003 Commercial Market Index Survey.The market is leveling and starting to drop even in some areas, with 83% of brokers saying they see evidence of stabilization in commercial lines.But brokers are not resting easy yet, says CIAB president Ken Crerar.”Leveling does not mean a soft market is returning. Industry analysts say the hard market is likely to last another 18 months, and brokers expect modest increases to continue in most lines with no great decline in rates.”Commercial property rates are moderating, although 55% of accounts report rates were up by as much as 20% still. Rates stayed the same for 17% of accounts, and down by as much as 20% for 15% of accounts. On large accounts, 58% saw increases up to 20%. About 66% of small accounts saw increases, and 70% of medium accounts. Among the “trouble spots” are medical malpractice, workers’ compensation and other liability covers such as directors’ and officers’ (D&O).For med mal, some 43% of accounts reported hikes upwards of 20%, with 12% having gone up between 50-100%. And 70% of workers’ comp accounts saw increases, as much as 30%. On general liability business, 73% of accounts were up by 20% or more.”The accounts that are more risky on a commercial general liability basis are, at times, getting lower limits than they want. Also pricing is still above 20% increases for the really tough risks,” one broker reports. Terrorism insurance is more widely available, brokers note, but the vast majority say customers are not buying it because they do not think it is necessary.