Rates are still falling in the US property and casualty market, despite indicators supporting a market turn, according to the market barometer compiled by Dallas-based insurance exchange MarketScout.

It says commercial property and business interruption rates fell 2% in May and general liability and inland marine declined 3%.

MarketScout CEO Richard Kerr says rates declined an average 4% in the month, with the soft market being prolonged by an underwriting war in the onshore energy sector, where rates fell 6%.

“The energy pricing war is primarily between two large insurers fighting for a controlling position and market share,” he said. “Underwriters from each company have realigned and egos are involved.”

Mr Kerr believes both competitors are pricing aggressively to force the other to surrender, in the hope the winner will then gain enough market share to offset the losses they are carrying now. He says a smaller, relatively new entrant to the energy sector is unrealistically aggressive, but until the war is decided “we expect a continuing soft market for the casualty portion of land-based energy accounts”.

Rates in manufacturing fell 4%, contracting and services industries public entity and transport fell 2% and residential property was down 1%.