CIAB says commercial insurance pricing continues to decline

One industry body recently stated that the first quarter of 2011 saw a decline in commercial insurance pricing by 2.9 per cent.

The Council of Insurance Agents & Brokers said in a recent announcement that while business insurance pricing continues to slide, the decline in Q1 2011 compared favorably to the 5.4 per cent pricing drop that occurred in the fourth quarter for2010.

The CIAB’s market index survey of commercial property and casualty insurance also showed that small and medium sized enterprise businesses fourth quarter 2010 declines were similar to this year’s first quarter.  However the industry body stated that on average business liability insurance pricing for large commercial accounts demonstrated a slight uptick instead.

In 2010’s third quarter, commercial insurance rates declined approximately 5.2 per cent according to the CIAB.  However, Ken A. Crerar, President of the CIAB, stated that it was simply too early to tell if the modest price increases and leveling off were the result of repercussions from the recent disaster in Japan and other major catastrophic events that had occurred earlier in 2010.   Mr Crerar also stated that it is possible that the market is simply reacting to broader conditions in the professional indemnity insurance marketplace.

For the majority of lines, the most significant percentage of insurance brokers stated that there were no significant rate changes during the first quarter of 2011 in comparison to the last three months of 2010.

The percentage of each market segment reporting no change in insurance rates included 55 per cent in terrorism cover, 45 per cent in business interruption cover, 37 per cent in the directors and officers liability market, and 33 per cent in the marine, flood, and broker errors and omissions insurance markets.

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