RJ and Makay

Though March saw commercial property & casualty (P&C) rates fall yet again, the average decline of 4% was at least smaller than the 5% drop that occurred in each of the previous four months. Also, several lines of coverage — workers comp, property, business interruption, small commercial, general liability, and automotive — are showing a moderation of rate cuts, MarketScout reports.

“We have finally broken out of the doldrums. Rates are moving,” remarks MarketScout CEO Richard Kerr. “It looks like the soft market from 2005 to 2011 will end with workers compensation and catastrophe exposed property risks leading the way out.”

Inflation is occurring in some industries, but not property-casualty. The composite rate for P&C insurance dropped 5% in February — the fourth straight month of 5% declines in the P&C market, reports MarketScout.

The market seems “stuck,” says MarketScout CEO Richard Kerr. “The rates by industry, coverage, or account size change a bit each month but generally all categories are staying in the same range of premium reductions.”

Although net income dropped 3% for the P&C insurance industry as a whole in the third quarter, it has spiked very nicely -- by 62% -- in the past nine months. So says a recent report produced jointly by the Property and Casualty Insurers Association of America, Insurance Information Institute, and Insurance Services Office (ISO).

"It is now all but certain that the P&C insurance industry will record positive growth in 2010 -- the first (time) since 2006,” says Robert P. Hartwig, president of the Insurance Information Institute, which is based in New York City. “While underwriting losses deteriorated marginally, the industry is still operating on a ‘break-even’ basis with a combined ratio of 99.7, after excluding mortgage and financial guaranty insurers.”