Q4 PROPERTY PREMIUMS DROPPED 9%:

Commercial insurance buyers say the cost of property insurance fell 8.8 percent in the fourth quarter of 2003, marking the first decline in premium prices in any major line of commercial insurance in nearly four years, according to the Risk and Insurance Management Society’s (RIMS) Benchmark Survey of market conditions. Risk managers also said that, while still experiencing some price inflation, other commercial insurance products’ price increases were either significantly lower than in the third quarter or those prices remained relatively flat, quarter over quarter, according to fourth-quarter renewal information summarized by Advisen Ltd. for RIMS. Leading indicators in the market, such as policy counts also suggest excess liability and director and officers liability premiums may be the next lines to experience declines in premium pricing. These developments reinforce the mounting evidence that the overall commercial insurance market, which had been weathering torrents of price increases since 2000, is calming and the hard market of the past few years is softening. The size of limits also declined by 4.4 percent. Other premiums continued to rise, but the rate of those increases slowed dramatically in some cases. For example, directors and officers liability, where increases neared 200 percent in 2003, the rate of increase slowed from 75 percent in the third quarter to just 17 percent in the past quarter.

Topics Property