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American rates down in June

While the trend everywhere else is up, general insurance rates in the US market appear to be continuing to slide. They dropped 6% in June, compared with a year earlier, according to insurance exchange MarketScout.

Its figures show “rate moderation” is proving slow but steady. The June 2008 figure was down 11% on 2007, which was down 14% on June 2006.

Prices for June this year were down in all lines of coverage, industry classes and sizes of accounts. Leading the declines were accounts over $US1 million ($1.28 million), with a drop of 7%.

MarketScout CEO Richard Kerr says many insurers are waiting to see how the July 1 reinsurance renewals will impact capacity.

“According to early reports, capacity for coastal property decreased and property catastrophe capacity in general is going to be tougher to secure,” he said. “Smart insurers are retaining their capacity until sensible risk return ratios are available.

“Poor underwriting results are pending for some major insurers. Expect significant market movement in the next 12 months with clear winners and losers.”