MarketScout: Avg. P-C Rate Hike 2% In 2004

NU Online News Service, Jan. 11, 4:04 p.m.EST?Calendar year 2004, with an average 2 percent increasein composite property-casualty premiums, will be remembered as thebeginning of a soft market, according to the chief executive of anonline insurance exchange.[@@]

"The 20-to-30 percent rate increases of 2002 and early 2003 arewell behind us. We have not yet bounced below the composite levelof zero-percent rate increases, but I am sure a barometer with acomposite rate decrease is coming very soon," predicted RichardKerr, chief executive officer of Dallas-based MarketScout.

Mr. Kerr noted that last year began with p-c rate increasesaveraging 11 percent in January. As the year progressed, theaverage increase slipped to 7 percent in June and progressivelyadjusted downward to the 2 percent average rate hike for Decemberof 2004, bringing the overall 2004 p-c rate increase to just 2percent.

MarketScout's Mr. Kerr said he anticipates rate declines in mostlines of coverage throughout 2005.

Large p-c accounts will experience the greatest overall ratedecreases in the New Year, Mr. Kerr predicted.

He said directors and officers liability pricing will fall aswell?mostly because the price went up so dramatically in 2002 and2003, not because underwriters feel the risk of writing D&O haslessened. He also forecast that pricing for auto liability, EPLI,fiduciary and surety coverages should continue to be fairly stable.As for all the other p-c coverages, the price is going down in2005, Mr. Kerr said.