Insurance companies' profits have dropped sharply and tens of billions of dollars have been wiped off their balance sheets, but insurers continue to renew commercial property and casualty insurance programmes at deeply depressed rates, according to the RIMS Benchmark Survey.

The survey, which is administered by Advisen Ltd., tracks changes in insurance policy renewal prices as reported by North American corporate risk managers. It reveals that commercial insurance buyers have been benefitting from low prices due partly to the global economic recession, which has suppressed demand for insurance capacity, prompting underwriters to compete for diminishing premium dollars.

"Insurers have bounced back from the worst first quarter on record, but their results are still pretty grim," said Dave Bradford, Advisen executive vice-president and editor-in-chief of the survey.

"Carriers are posting underwriting losses, but in this recession, they have found it nearly impossible to push through rate increases except in a few especially distressed areas."

The survey found that property insurance policies were renewed in the third quarter with essentially no change in average premium.

Directors and officers liability (D&O) policies were also renewed with no change in average premium, although the D&O market remains divided between the financial institution segment, which was pummelled by the sub-prime mortgage market meltdown and has seen premiums rise, and the rest of the market, which has still seen premiums drift lower.

The average general liability premium fell 3.7 percent and the average workers' compensation premium was down 4.5 percent, according to the findings. Contributing to lower general liability and workers compensation average premiums were declining sales and payrolls, which were used to calculate premiums.

"It's still a buyer's market, and it looks as if it may stay that way for a while," said Daniel Kugler, member of RIMS board of directors and assistant treasurer, risk management, at Snap-on Inc. "Under normal circumstances, premiums should be rising by now. But many companies are buying less insurance, and underwriters feel pressured to keep prices low to hold on to the remaining premium dollars."