P&C Agent and Broker Survey
January 2009 Renewal Market Trends For Middle-
Market, Small-Commercial & Personal Lines
Non-Life Insurance
Matthew G HeimermannAC
(1-212) 622-6545
matthew.g.heimermann@jpmorgan.com
Keith Alexander
(1-212) 622-2984
keith.x.alexander@jpmorgan.com
J.P. Morgan Securities Inc.
See page 94 for analyst certification and important disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may
have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision.
Rate Change, Past 12 Months
Percent
-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10%
Homeowners
Personal Auto
Personal Lines
Specialty Lines
Umbrella
Commercial Liability
Workers Comp
Commercial Auto
Property/Fire
Commercial Lines
All Lines (simple average)
All lines
Jan-2009 Jul-2008
Source: J.P. Morgan survey results.
Expected Rate Change, Next 12 Months
Percent
-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10%
Homeowners
Personal Auto
Personal lines
Specialty Lines
Umbrella
Commercial Liability
Workers Comp
Commercial Auto
Property/Fire
Commercial lines
All Lines (simple average)
All lines
Jan-2009 Jul-2008
Source: J.P. Morgan survey results.
Note: All lines - weighting based on each line’s
contribution to total P&C written premiums.
Please refer to page 2 for details on how to
navigate this report, or pages 8 and 44 for details
on rate changes over the past twelve months and
expectations for next year, respectively.
Our January 2009 J.P. Morgan P&C Agent and Broker Survey suggests that rates
in all products within middle-market, small-commercial, and personal lines fell
1.6% at January 1, 2008, versus a year ago. This contrasts with a 4.7% reduction
in July and an expected decline of 2.4%. Respondents are calling for a rate
increase of 1.6% over the next 12 months, reflecting firming markets catalyzed by
capital depletions from investment and catastrophe losses as well as rising
reinsurance costs. For underwriters, rate increases could help stabilize margins,
especially if reserve releases slow, although top-line growth may be affected by a
weak economy. For brokers, our expectation of widespread growth pressures
remains unchanged as any premium benefit from rate increases will likely be
offset by near-term reductions in exposures. The independent agents and brokers
in our survey seem to be somewhat more optimistic than six months ago.
• For underwriters, prices are falling, but poised to flatten/increase… Rates in
commercial lines fell 3.0% versus 12 months ago (and 7.2% in July), with
property/fire, workers' compensation and commercial liability under the most
pressure. The magnitude of rate declines remained tied to account size. Agents
expect rates to increase 1.3% over the next year. In personal lines, rates appear
flat, on average, with homeowners offsetting slight declines in auto. Looking
forward, agents expect personal lines rates to increase 2.0% in 12 months.
• …as competition for business appears to be falling. Respondents indicated
that the number of companies with which they are doing business is slightly
lower at six, on average, versus eight in July. Agents and brokers appear to be
using fewer carriers in all lines, with the most significant reductions in specialty
commercial lines, reflecting continued contractions in the amount of business
that is being placed in non-admitted or excess and surplus line markets. Not
surprisingly, respondents, on average, plan to increase business volumes with
underwriters if appetite for business increases with rates.
• Distributors appear more optimistic due to increasing prices… 75% of the
respondents indicated that business volumes were stable or increased over the
past 12 months, up from 70% in July. Again, the area of most consistent growth
for agents and brokers was employee benefits, followed by personal, while
commercial lines were essentially flat, on average. Over the next 12 months,
agents’ expectations are increasingly optimistic, with 57% expecting an increase
in activity due to rate increases versus only 40% six months ago.
• …despite concerns about organic growth and client retention. The most
universal concern for producers remains new business, followed by retention.
Given that respondents do not expect commission ratios, which averaged 12.3%,
down from 12.7% in July, to change in the next 12 months, retention will likely
remain important to sustaining revenues. Commission levels appear to be a
higher concern than in our last survey, suggesting that brokers may attempt to
negotiate higher commissions to help offset growth shortfalls and any pressure
from a weakening economy on exposures.

Table of Contents
About The Survey.....................................................................3
Navigating The Results............................................................3
Methodology .............................................................................6
Underwriting Results ...............................................................7
Distribution Results ...............................................................63