NU Online News Service

Premium rates in June remained soft, but continued to show somesigns of easing off the worst of the declines with decreases in thelow single digits, according to MarketScout.

The Dallas-based electronic insurance exchange's monthlybarometer showed June overall premium rates at negative threepercent for the second month in a row--a vast improvement over lastyear's negative six percent.

"Halfway through 2010, it appears the U.S. property and casualtymarket is stuck in a moderating, but continuing soft market," saidRichard Kerr, founder and chief executive officer of MarketScout,in a statement. "A good measurement of market position for thebalance of this year will be the composite rate for July as it isthe second largest renewal month each year."

Kerr noted that the two largest market segments--commercialproperty and general liability--had market decreases of fourpercent. Commercial property declines remained the same on amonth-to-month basis, while general liability moderated a bit fromMay's five percent decrease.

Other lines, Kerr said, remained at the same level as May orshifted by one percentage point.

"Crime coverages actually increased one percent, perhaps becauseof increased losses [that] may have developed throughout theeconomic downturn," Kerr suggested.

Crime moved from flat in May to up one percent.

Among other lines, umbrella/excess, commercial auto and workers'compensation went from negative three percent in May to negativetwo percent in June, and fiduciary went from negative one percentin May to negative two percent in June.

Examining account size, only large accounts remained unchangedon a month-to-month basis at negative four percent. Small accountswent from negative two percent in May to negative 3 percent inJune, and medium accounts were down two percent in June from threepercent in May.

Rounding out account size, jumbo accounts of more than $1million in premium went from negative five percent in May tonegative four percent last month.

In an analyst's note on the MarketScout report, Meyer Shields ofStifel Nicolaus said the outlook for commercial lines insurance isviewed as "mostly negative," but he is bullish about personal linesinsurers.

Explaining the more positive outlook for personal lines, he saidrates are rising above inflation and the bigger insurers in thepersonal lines market will be using economy of scale to gain morebusiness. Profits for these insurers have also not been "undulyboosted" by reserve changes.

He also said the insurance brokers--Aon, Marsh andWillis--should begin to see improvements as the recession eases andsoft market pressures begin to diminish, translating into organicgrowth at the firms.