The commercial insurance market is continuing to soften, with most classes experiencing rate reductions of 1-9%, but insurance brokers say the falls are generally less severe than six months ago.

Most participants (60.5%) in the National Insurance Brokers Association (NIBA) Market Conditions Questionnaire – which is completed by qualified practising insurance brokers during the insurance renewals periods in January and June – said clients have experienced decreases in premiums.

And 35% of respondents said clients experienced no change in their premiums.

NIBA CEO Noel Pettersen told Sunrise Exchange News it appears insurers have been more prudent in their rate-setting.

Renewal trends over the past year or so suggested underwriters were cutting rates to gain new business and retain it. The pricing rationale of many insurers was questioned, as were their motives for lowering rates.

“Broker feedback suggests rates are stabilising, but underwriters are still keen to negotiate for business,” Mr Pettersen said. “Some brokers said many of the terms and conditions of last year’s policies were ‘rolled over’ for this year.”

Most respondents said public liability, business interruption and professional indemnity rates dropped 1-9% – quite a change from the 10-19% increase during June renewals last year.

More than 28% said directors’ and officers’ rates fell 1-9%, and 28% said they were unchanged.
 
On a hardness scale of one to 10 – one being the softest and 10 the hardest – most respondents assessed the commercial market at four. This represents a slight softening of the market, as respondents in the last June survey rated the market at five.

Personal lines rates were generally static, if not slightly harder. Most brokers rated this market segment at five, compared with three in June.