US commercial insurance rates grew 2% last month, slowing from a 3% increase in March due to stiff competition, according to analyst MarketScout.

The trend could bring rate reductions by the end of the year, CEO Richard Kerr warns.

“If you are in the market on a daily basis you can almost feel a change in the wind. No reasonable insurer wants rate reductions. However, everyone seems to feel they are coming.”

The US property and casualty market has enjoyed 29 consecutive months of price increases, but now insurers, supported by reinsurers, catastrophe bonds and insurance-linked securities, are finding reasons to fight for business.

Rate rises on accounts with premiums between $US25,000 and $US250,000 ($26,692 and $266,920) declined to 2% last month from 3%, while accounts from $US250,000 to $US1 million ($266,920 to $1.07 million) moved to 1% from 3%.

By sector, commercial auto and workers’ compensation rates grew 3% each, and commercial property increased 2%. Personal lines held steady at 3%.

“Spread of risk is extremely important for personal lines insurers,” Mr Kerr said. “Those that are heavily burdened with catastrophe-exposed business are taking a big chance.

“We are noting insurers are actually requiring a balanced book if agents want to access their cat capacity.”