Insurance brokers are asking for premium cuts - and getting them. In the second quarter of this year, 81 percent of commercial property policies renewed for less, and 31 percent of commercial auto policies dropped, according to the Insurance Information Institute, a trade group.

Actual decreases

Rate increases peaked in mid-2003, and now many insurers are actually cutting rates to keep business. Premiums for commercial property dropped 8.8 percent in the last quarter of 2003, and have dropped slightly during the first two quarters of this year, too, according to Advisen Ltd., which polls insurance purchasers.

"This is a good time to put your insurance out to bid," said Dana Gold, a risk-management consultant in Atlantic Beach, N.Y. "Unless all of your property is in Florida, or unless you have some sort of horrendous claim experience ... it's a pleasure for the insured."

It's still possible that hurricane devastation - with damages topping $20 billion - will boost rates again. But Robert Hartwig, chief economist at IIl., said there are powerful opposing forces: Competition, and insurance buyers weary of three years of rate increases. Reinsurance and Florida's catastrophic insurance fund will combine to limit hurricane losses, he said.

Regional effect

The hurricanes could cause "higher prices for homeowner's insurance and reinsurance in the southeastern United States, but this will have little effect on insurers' or reinsurers' ability to underwrite property risks in, say, Kansas or Minnesota," Hartwig said.

He said most homeowners and individual auto policies are seeing low single-digit increases. But for commercial insurance, "It's a very competitive business. A lot of capital has entered the business post-9/11," Hartwig said. "As prices went up and results improved, that attracted additional competition."

Fears after 9/11

Not since 1978 have commercial insurers charged more than they paid out in claims, Hartwig said. (Investment returns made up the difference.) Sharp rate increases after the Sept. 11 attacks and more discipline in whom they cover raised hopes that this year would change that trend. Now the hurricanes may have put that goal out of reach, Hartwig said. Also, the higher rates have increased competition - forcing rates lower again, he said.

Insurance executives are admitting as much.

Jay Fishman, chief executive of the country's second-largest commercial insurer St. Paul Travelers Co., told analysts Monday that rate increases are moderating or turning "somewhat negative."

Balancing act

He said St. Paul Travelers would rather lose customers than lower premiums - within limits. Giving up premiums "is a very expensive thing to do, and we will do so reluctantly, and we will do so only as a follower, and only when there's no other course of action," Fishman said.

Insurance buyers said it's about time rates come back down a little.

"I think most insurance companies knee-jerked after 9/11, and I think they're coming back down to Earth now," said Bob Dabler, the risk manager for Ash Grove Cement Co. in Overland Park, Kan.

"It's a relief. After 9/11 when you saw 50 to 70 percent increases, it was quite shocking. But now they're coming back down, so barring any losses on our end ... I'm hoping it'll level out," he said.

Gold, the insurance consultant, said these cycles typically last about eight years - and she tries to make the most of them in negotiations with insurance brokers.

"I go and ask for everything I can get," she said, "because I know when the hard market comes around, the carriers are going to sock it to me."