Ratings agencies and insurance industry researchers are calling an end to the soft market in the US.

Marsh says that July marked an end to 18 months of steady declines in property rates as losses flowed from the Japan earthquake and US tornadoes.

“Preliminary median renewal rates thus far in the third quarter have increased 0.1%; the average rate increase was 1.1%,” it said.

But the global broker says general liability premium renewal rates are still falling, although the decrease has slowed.

“Significant competition among insurers remains, meaning that for the remainder of the third and fourth quarters insureds with favourable loss experience can likely expect rates to remain flat or decrease modestly at renewal.”

AM Best says the US property and casualty market incurred losses of $US27 billion ($25.5 billion) from catastrophes in the first half, compared with $US11.9 billion ($11.2 billion) in the first half last year. 

It says although the industry has the capital to absorb the losses, a devastating hurricane season may be enough to turn the market cycle.

AM Best says that so far the impact has been on insurers’ earnings rather than on their capital position.

Fitch Ratings says US property and casualty insurers’ reserves have deteriorated moderately but they are still adequate. 

It sees no near-term likelihood of large deficiencies in reserves.

The agency says the industry is benefitting from years of strong underwriting results, which built up reserves to carry it through the past five years.