Public liability and professional indemnity premium rates have reduced in the past 12 months, but pricing is still at a technical rate, says QBE CFO Neil Drabsch.

Mr Drabsch told Sunrise Exchange News yesterday the industry isn’t at risk of returning to an overly soft market because of the “important factor that the reinsurance market is holding very, very firm and not showing any signs of weakening”.

“In the past, if the reinsurers would give in insurers would drop rates, and then you would see a soft market,” he said. “That’s not what we’re seeing now.”

He says rate reductions across commercial lines classes are “widespread across the industry” – and certainly not limited to QBE.

“Reasons for the premium reductions – particularly for public liability premiums – include a number of factors like tort reform, competition and a focus on customers taking better measures in risk management.

“I think most insurers would agree that they’ve seen a reduction in claims because of tort reform, and I think the Government deserves a pat on the back for their efforts,” Mr Drabsch said.  

As to whether Hurricane Katrina will have an effect on rates, Mr Drabsch says international reinsurers “aren’t showing any weakness after the event. They should hold very firm.”