Commercial property/casualty insurance rates declined an average of 6% in June compared with those of a year earlier, MarketScout said Tuesday.
The declines hit all lines of coverage, all industry classes and all sizes of accounts, with the largest accounts enjoying the greatest declines, according to the Dallas-based electronic insurance exchange.
“June renewals show rate declines that continue to moderate, with many insurers waiting to determine how the July 1 reinsurance renewals will impact capacity,” Richard Kerr, MarketScout’s chief executive officer, said in a statement. “According to early reports, capacity for coastal property decreased and property catastrophe capacity in general is going to be tougher to secure. Berkshire Hathaway’s decision to curtail property catastrophe capacity has some speculating whether Berkshire is trying to avoid losses and the resulting pressure on their balance sheet or simply limiting capacity anticipating higher rates.
“Smart insurers are retaining their capacity until sensible risk return ratios are available,” Mr. Kerr said in the statement. “Poor underwriting results are pending for some major insurers. Expect significant market movement in the next 12 months with clear winners and losers.”
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