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Renewing insurance sees rate declines except catastrophe-prone areas: Marsh

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Rate decreases remained common in most classes of insurance business renewing in the third quarter that were not affected by recent catastrophes, Marsh Inc. said in a report issued Friday.

“Across lines of business, insurers priced risks competitively and retained a healthy appetite for new business,” said Dean Klisura, Marsh’s U.S. risk practices leader, in a statement.

Rates did increase on insurance contracts in areas where the industry experienced losses, such as Australia, which suffered from flooding earlier in the year, said the unit of the New York-based Marsh & McLennan Cos. Inc. For example, prices on catastrophe-exposed property programs in Australia increased on contract renewal by as much as 10% during the third quarter.

But insurance prices remained flat or declined in many lines of insurance coverage, Marsh said. In the United States and Canada, for example, property programs not exposed to catastrophes renewed in the third quarter at the same rates they’d had a year earlier, according to Marsh’s analysis.

Globally, most casualty business renewed insurance contracts either at the same prices or with small decreases in the quarter, Marsh said. For example, professional liability insurance rates in the U.S. and Canadian markets decreased as much as 10% on contract renewal, Marsh found.

Marsh’s analysis, “Insurance Market Update Third Quarter 2011,” added a caveat.

“The large level of losses in the first half of 2011 means that there is still the potential for a changing market dynamic this year, especially if there is a further significant market loss,” Marsh said in its analysis.

New York-based consultant Towers Watson & Co. said earlier this month that commercial insurance prices increased nearly 1.5% during the second quarter compared with the same period last year.