The end is in sight for the soft market in the commercial property and casualty industry.

According to Towers Perrin's recent commercial lines insurance pricing and profitability trends survey (CLIPS), the evidence for this is the smallest decline-less than 1 percent-in commercial P&C insurance prices in four years.

Small-account commercial prices continued their pattern of steady but smaller decreases in the first quarter of 2009. However, there were some increases in pricing during those months. Prices for property and directors and officers (D&O) liability rose slightly. And prices for large accounts-those with annual premiums in excess of $50,000-also increased. This upturn is not surprising, given that large account prices eroded substantially more than middle-market and small accounts in 2007 and 2008.

None of the surveyed lines saw a deepening of price reductions from the fourth quarter of 2008. All first quarter decreases were in the low single digits for lines where prices fell.

"Premiums in many lines may be falling faster than prices in some segments of the market, because lower payrolls, receipts, miles driven and other measures of exposures are declining due to the current economic climate," explained Stephen Lowe, managing director of Towers Perrin's global property & casualty insurance consulting practice. "This reduced exposure from economic conditions may account for some of the disparity between the CLIPS survey results and the surveys published by the insurance brokers."

Lowe added that anecdotal evidence indicates that property insurance prices are continuing to rise in catastrophe-prone areas and declining slightly in non-catastrophe areas.

Year to date through the first quarter, CLIPS data indicate that accident year 2009 loss ratios deteriorated 11 percent compared with 2008. This deterioration comes on top of an estimated deterioration for accident year 2008 of 9 percent compared with 2007. Increases in claim costs and the "earning" of the price decreases taken in the last four quarters both contributed to loss ratio deterioration for 2009.

CLIPS data are based on both new and renewal business figures obtained directly from carriers underwriting the business and indicate more conservative price reductions than other marketplace surveys. This survey compared prices charged on policies underwritten during Q1 2009 to the prices charged for the same coverage during Q1 2008.