Property rates have bucked the downward trend in worldwide commercial premiums, according to the lat...
Property rates have bucked the downward trend in worldwide commercial premiums, according to the latest Risk and Insurance Management Society survey.
Rims' third quarter report said that steady erosion of commercial insurance industry pricing continued, as has been the case in recent quarters, with only property insurance showing an increase in the average renewal premium, driven substantially by companies in earthquake-exposed regions.
Average property premiums rose 2.1% in the third quarter of 2007. Directors' and officers' liability meanwhile posted the largest decrease at 3.9%, while average general liability premiums decreased by 3.2%.
"For the most part, pricing trends continue to be very positive for commercial buyers," said John Phelps, member of Rims' board of directors and director of business risk solutions for Florida-based Blue Cross and Blue Shield.
"All indicators point to further improvements in the fourth quarter, barring a major catastrophe."
"The soft market is driven by rapidly increasing policyholders' surplus, which equates to insurance capacity," added David Bradford, editor-in-chief of Advisen. "Underwriting profits and strong investment returns add to surplus, which suggest that this soft market has a long way to go before it reaches bottom."
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