Commercial insurance buyers saw premiums continue to tumble in the fourth quarter, with few signs that the soft phase of the pricing cycle was nearing an end, according to the RIMS Benchmark Survey™, administered by Advisen Ltd.

The survey tracks changes in insurance policy renewal prices as reported by North American corporate risk managers.

Directors and officers liability (D&O), general liability and workers compensation all posted decreases in average premium, while property once again held steady.

"Pricing trends have been remarkably consistent over the past several quarters," said Dave Bradford, executive vice-president of Advisen and editor-in-chief of the survey.

"The combination of a weak economy, which has suppressed demand for insurance capacity, combined with a very mild year for natural catastrophes, has kept downward pressure on rate levels. Unless very large catastrophe losses soak up excess capacity, we expect to see this trend continue well into 2010."

Workers' compensation and general liability saw the largest decreases, with average declines in renewal premiums of 5.5 percent and five percent respectively.

Average D&O premium fell 2.8 percent, and property was essentially unchanged, falling less than half of a percentage point.

"Some risk managers are reporting higher renewal premiums but, overall, the market continues to be very favorable for insurance buyers," said Daniel Kugler, member of RIMS board of directors and assistant treasurer of risk management, at Snap-on Inc. "Capacity is abundant in almost every line of insurance. As things now stand, there is little reason to expect commercial insurance prices to increase in the near future. More likely, they will fall yet further."

While market conditions are benefiting insurance buyers, they are contributing to growing financial stress on agents and brokers that derive much of their income from commissions on insurance premiums.

Not only is commission income down because of falling rates, the global recession has cut into insurance premium volume as companies downsize or go out of business.

Insurance companies also are suffering from lower premium volume, but the impact is lessened by income from invested assets and by favorable claims experience due to the fact that no major natural catastrophes occurred in the US in 2009.

The US property and casualty insurance industry posted a 4.5 percent return on average surplus for the first nine months, rebounding from a negative rate of return in the first quarter, according to the Insurance Information Institute.