The soft market shows few signs of loosening its grip on commercial insurance pricing, according to the RIMS Benchmark Survey.

The survey, which was conducted by Advisen Ltd., revealed that average premiums in every line fell during the first quarter.

But it found that forecasts for an above-average hurricane season could signal rising premiums were on the horizon.

"Insurance capacity is abundant throughout the commercial lines market, but the lingering impact of the global recession has reduced the demand for that capacity," said Dave Bradford, Advisen executive vice-president.

"Abundant capacity coupled with diminished demand keeps downward pressure on rates. As things now stand, insurance buyers can anticipate another year of favourable insurance prices, although catastrophe claims always are a wild card in the pricing cycle."

The survey showed that, as has been the case throughout much of the soft market phase, general liability was the most competitive line during the quarter, with the average premium falling 4.4 percent. The average property premium, which had been essentially flat over the past several quarters, fell 2.9 percent.

The average workers compensation premium was down two percent, and average directors and officers liability (D&O) premium was off 1.1 percent. D&O average premium had been flat to slightly higher throughout 2009 due to rate increases in the financial institution sector, but those rises now have abated.

"Rate levels are down, but insurers nonetheless posted good results in 2009," said Robert Cartwright, loss prevention manager for Bridgestone Americas Holding Inc. and a member of the RIMS board of directors.

"As a result, underwriters have not been highly motivated to push for higher premiums. That certainly is good news for risk managers. Forecasters are calling for an active hurricane season this year, though. Large catastrophe losses could cause prices to increase across the board."

Furthermore, the study found that Colorado State University hurricane forecasters predicted 15 named storms, eight hurricanes and four major hurricanes in 2010.

As risk managers and other commercial insurance buyers were benefiting from lower premiums, insurance brokers were suffering from the double whammy of lower rates and reduced premiums levels resulting from the lingering effects of the recession.

Much of brokers' revenue is tied directly to the volume of premium placed with insurers. Some types of insurance policies calculate premiums based on factors, such as payroll and revenue, which have fallen substantially as an outcome of the recession.

Workers compensation premium volume, which is based principally on payroll, has been particularly hard-hit by the economic downturn. Consequently, many brokers have been forced to streamline operations and reduce headcount to maintain profitability.