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NU Online News Service, Oct. 28, 3:51 p.m. EDT
Insurance rates for the third quarter continued their overall decline at a slightly steeper rate than the previous quarter, according to a survey of insurance brokers.
The Council of Insurance Agents & Brokers released its third-quarter commercial property and casualty survey of its members, noting that rates on average declined 6 percent during the third quarter compared to a 5 percent decline for the second quarter last year.
“Suppressed demand and appetite for business continued to drive competitive pricing in the market during the third quarter,” CIAB President Ken A. Crerar said in a statement. “It was still very much a buyer’s market as carriers chased market share. A significant upward turn in pricing remains elusive for the foreseeable future.”
Rate declines increased for small, medium and large accounts over the previous quarter by close to 1 percent, according to the survey.
The amount of decrease for small accounts expanded from 2.5 percent in the second quarter to 3.6 percent. The decrease for medium size accounts was 5.7 percent in the second quarter, dropping to 6.5 percent in the third. Large accounts saw the sharpest overall declines, going from 6.7 percent in the second quarter to 7.4 percent.
The CIAB said in comments from brokers that while some carriers were trying to get better rates, they would end up decreasing prices to preserve business. However, two segments—directors and officers for financial institutions and catastrophe property—showed underwriting discipline.
The report also noted that the hardest hit insurance segment was the excess and surplus lines market because standard line carriers continue to enter businesses in an effort to gain market.