Commercial property insurance premiums drop in Q1.

Commercial property insurance premiums experienced the largest quarterly decrease during the first quarter of 2008 since the drop in 2005 following Hurricane Katrina, according to a survey by the New York-based Risk and Insurance Management Society Inc. (RIMS).

Undeterred by mounting claims

from the meltdown of the subprime mortgage market, the RIMS Benchmark Survey[TM]--which was produced for RIMS by New York-based Advisen Ltd.--noted that the average directors and officers (D&O) liability premium fell 19 percent in the first quarter, the largest decrease of all the lines of business tracked by the survey.

"We expected to see the soft market continue into 2008," said John R. Phelps, member of RIMS' board of directors. "Not only are soft market conditions ongoing, they appear to be accelerating--due in no small part to the excellent combined ratios for key markets. This bodes well for insurance buyers this year."

Continuing the trend of steady, moderate decreases exhibited over the past two years, general liability premiums fell another 2 percent.

In a clear indication that competition is returning to catas-trophe-exposed regions, property premiums fell 6 percent--the largest quarterly decrease since Hurricane Katrina, according to David Bradford, Advisen editor-in-chief and report co-author.

"Frankly, we were surprised to see downward momentum building at this pace. It is an indication of just how overcapitalized the commercial property and casualty insurance industry is," said Bradford. "Rapidly deteriorating rate levels will ' wipe out insurer underwriting profits this year, but if there are no major catastrophes, premiums should still continue to fall for a while."