Flat commercial insurance rates may signal end of soft market: MarketScout

Overall commercial property/casualty insurance rates did not change between September 2010 and this September, perhaps signaling an end to the soft market, MarketScout reported Friday.

The Dallas-based electronic insurance exchange found that workers compensation rates rose 2% while commercial property rate rose 1%. Professional liability, directors and officers liability, fiduciary and crime pricing was flat. But general liability and umbrella/excess coverage continued to soften, falling 2%, while commercial automobile dropped 1%.

“Brokers and insurers shouldn’t pop the champagne just yet, but there is light at the end of the soft market tunnel,” Richard Kerr, CEO of MarketScout, said in a statement announcing the September results.

“Financial metrics may not necessarily call for pricing adjustments in all areas, but after six and a half years, the market may turn anyway,” he said.

“Workers compensation and catastrophe-exposed property classes are leading the way towards higher rates. Despite the pending rate increases, some insurers will continue to suffer because of aggressive pricing on long-tail business,” Mr. Kerr said. “We expect insurers will make changes in executive positions as underwriting losses and poor decision-making become more apparent.”