Market Pricing Remains in the Doldrums

The composite property and casualty rate in the United States was down 4 percent for January 2010, prolonging the soft market. However, there were some notable changes in rates by line of coverage and industry group.

According to Richard Kerr, CEO of MarketScout, "While the composite rate remained at minus 4 percent, we noted rates for Service, Public Entities and Energy decreased further with Public Entities moving from a minus 3 percent to minus 5 percent. In addition, Directors & Officers, one of the only coverages that went several months in 2009 without rate decreases, slipped back and was hit with an average rate decrease of 2 percent for January 2010."

The current soft market cycle seems to have no end. Kerr reflected upon the market conditions by stating, "We are in the market doldrums and will be here until something changes. Insurers must be patient. Rates will adjust but nothing will happen quickly without a cataclysmic event of significant magnitude."

The National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout's analysis of market conditions. These surveys help to further corroborate MarketScout's actual findings, which are mathematically driven by actual new and renewal placements across the United States.

A summary of January 2010 rates by coverage, industry class and account size is set forth below.

By Coverage Class

Commercial Property

Down 4%

Business Interruption

Down 2%

BOP

Down 2%

Inland Marine

Down 4%

General Liability

Down 4%

Umbrella/Excess

Down 4%

Commercial Auto

Down 4%

Workers' Compensation

Down 3%

Professional Liability

Down 1%

D&O Liability

Down 2%

EPLI

Down 1%

Fiduciary

Down 1%

Crime

Down 1%

Surety

Down 1%

By Account Size

Small Accounts

Down 3%

Up to $25,000

Medium Accounts

Down 4%

$25,001 - $250,000

Large Accounts

Down 5%

$250,000 - $1,000,000

Jumbo Accounts

Down 4%

Over $1,000,000

By Industry Class

Manufacturing

Down 4%

Contracting

Down 3%

Service

Down 5%

Habitational

Down 2%

Public Entity

Down 5%

Transportation

Down 3%

Energy

Down 3%