Market Barometer - June 2008

Composite Rate Decline Continues to Moderate

The average property and casualty premium rates declined eleven percent in June 2008 as compared to a decline of fourteen percent in June 2007. This is the largest year on year rate moderation in the last three years.

According to Richard Kerr, Founder and CEO of MarketScout, “The June 2008 composite rate of decline has moderated 21% as compared to June 2007. If July continues in a similar pattern, we June be nearing the bottom of the soft market. Why? Underwriting results are weakening and the issues some very large insurers are facing will have an impact on the market as a whole. The current climate is still soft, but underwriters cannot control many of the financial issues facing some insurers. These outside financial influences are starting to make the market a bit nervous. Thus, the moderating of rate reductions.”

MarketScout has been tracking the US property & casualty market since 2001. The Barometer is created using data assimilated via its online insurance exchange and is supported by in person surveys of retail agents, company personnel, wholesale brokers, and MGAs.

The rates for June 2008, broken down by coverage class, industry class and account size were as follows:

By Coverage Class
Commercial Property	Down 15%
Business Interruption	Down 9%
Inland Marine	Down 9%
General Liability	Down 12%
Umbrella/Excess	Down 10%
Commercial Auto	Down 10%
Workers' Compensation	Down 8%
Professional Liability	Down 7%
D&O Liability	Down 6%
EPLI	Down 11%
Fiduciary	Down 7%
Crime	Down 9%
Surety	Down 8%

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By Account Size
Small Accounts	Down 11%
Up to $25,000
Medium Accounts	Down 11%
$25,001 - $250,000
Large Accounts	Down 12%
$250,000 - $1,000,000
Jumbo Accounts	Down 10%
Over $1,000,000

Click image to enlarge

By Industry Class
Manufacturing	Down 12%
Contracting	Down 10%
Service	Down 12%
Habitational	Down 12%
Public Entity	Down 10%
Transportation	Down 10%
Energy	Down 9%

Click image to enlarge

The findings of MarketScout’s barometer are further supported by surveys conducted by The National Alliance for Insurance Education and Research. These surveys were conducted during CIC and CRM institutes held across the United States in June 2008.

MarketScout
The barometer is compiled by MarketScout, a Dallas, Texas based electronic insurance exchange which underwrites and distributes hundreds of product lines to its 60,000-member agency network across the United States. Over 40 "A" Rated carriers participate in the MarketScout exchange platform at http://www.marketscout.com.

The Market Barometer is published on the 5th of each month for the previous month's market. If you would like to use the barometer for an article or publication, please contact:

Vilma Scott
vscott@marketscout.com
972-934-4224

The composite market conditions from 2001 to 2008 are set forth below.