MarketScout: Downward Trend Eases Up on Insurance Rates Last Month
According to a report by Dallas-based MarketScout, the downward trend that insurance rates have experienced reflected moderating signs last month with a 14 percent composite decrease, one point less than January.
According to the report, its figures, based on its insurance exchange transactions, shows the composite decrease continues to slow, moving from 16 percent in December to 15 percent in January and 14 percent for February.
“Premium reductions are strongest in the service contractor industry group,” said Richard Kerr, founder and chief executive officer of MarketScout, in a statement.
“General liability coverage for a service contractor with total premiums of $25,000 to $100,000 is the most price competitive segment of the U.S. [property-casualty] markets as of February 2008,” he related.
Mr. Kerr said, “Rate reductions are moderating in a select group of industries and coverages. In particular, oil and gas contractors are not seeing price reductions as dramatic as what they enjoyed in 2007.
“Also, many state mandated workers’ compensation rate reductions were implemented in 2007, so premium reductions should moderate in 2008 unless insurers begin to aggressively apply credits, thereby reducing the ultimate premium.”
By class of business, commercial property was down 17 percent, the largest decline of 13 classes listed. Business interruption and general liability were not far behind with a 16 percent decline. Worker's comp, fiduciary and crime experienced the least decrease at 8 percent. Surety was close at 9 percent decrease. The remaining lines were down 12-to-15 percent.
Of the four account sizes, medium accounts (premium between $25,001 and $250,000) experienced the sharpest decrease at 16 percent, followed by small accounts (premium up to $25,000) at 15 percent. The remaining two, large accounts (premium between $250,000 and $1 million) and jumbo accounts (premium north of $1 million) were down 13 percent and 14 percent, respectively.
By industry class, contracting and service were both down 16 percent, followed by manufacturing and habitational at 15 percent. Rounding out the industry class, transportation and energy decreased 13 percent and public entity showed the least decrease at 12 percent.
Published on March 7, 2008
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