NEWS RELEASE – Thursday, April 16, 2009 Contact: Maura Nelson Vice President, Marketing & Communications 202‐662‐4432 maura.nelson@ciab.com For Immediate Release Commercial Market Flat, But Kept Its Tread in First Quarter For the second quarter in a row, commercial property/casualty market premiums continued to level off across small, medium and large accounts, according to The Council of Insurance Agents & Brokers’ first quarter 2009 Commercial P/C Market Index Survey. “We saw some rates creeping up as the impact of the weak economy and increases in reinsurance rates took hold in the primary market,” Council President Ken A. Crerar said. “It was by no means a dramatic turnaround and insurers continued to be very competitive out there, but the line on rates appeared to be holding, particularly on renewals,” Crerar noted. Many brokers said rates were flat, while others said the market is firming in some areas. “Pricing seems to be firming a bit but underwriters are still willing to negotiate,” one broker said. Another broker said “[Insurers are] trying to keep renewals flat but cutting like heck on new business opportunities.” “Carriers are beginning to tighten up looking for flat to increase for their renewals. Rate decreases however are still coming, but not as drastic from first quarter 2008,” a broker remarked. And one respondent said, “They [underwriters] are trying to get rate increases, but desperate to keep business so rates stay flat to slightly lower.” While there was some upward rate creep, first quarter 2009 commercial rates declined on average by 5.1 percent, compared with a 6.4 percent decrease in the fourth quarter, according to the analysis prepared for The Council by Barclays Capital Equity Research. On average, large accounts were down 6.4 percent compared with 8 percent in the fourth quarter. The average decline for medium account premiums was 5.6 percent compared to 7.1 percent last quarter, while small accounts dropped 3.3 percent compared with 4.2 percent in the earlier period. Average Rate Declined 5% in 1Q09 Small Mid Large Avg 1Q09 -3.3% -5.6% -6.4% -5.1% 4Q08 -4.2% -7.1% -8.0% -6.4% 3Q08 -7.8% -12.1% -13.2% -12.9% 2Q08 -9.7% -14.1% -14.8% -12.9% 1Q08 -10.0% -14.7% 15.7% -13.5% High (4Q01) 20.8% 31.7% 33.0% 28.5% Low (3Q07) -10.0% -15.0% -15.9% -13.6% Source: The Council of Insurance Agents & Brokers. Chart prepared by Barclays Capital Equity Research.