Brokers say US premiums are falling but AIG is not to blame

Commercial insurance prices in the US continue to fall but AIG is not under-pricing say Aon, Marsh and Willis, Dow Jones reports.

"We have to face the fact that the market is soft and getting softer," said Brian Duperreault, chief executive of Marsh & McLennan. Some other regions are growing, he said, such as Asia and South America, where Marsh, the company's brokerage business, has a big presence. "We will focus on that," he said.

Greg Case, chief executive of Aon, sees prices beginning "to flatten out" in some spots, but he doesn't expect to see "meaningful movement" in prices before the second half of 2010. Latin America was a strong region in the third quarter, and the company is adding new services.

Duperreault and others denied that AIG was slashing prices on insurance renewals to keep business, setting prices below costs and using its government bailout to cover the difference.

Joe Plumeri, chief executive of third-largest broker Willis called the concerns "overblown."

Duperreault said it would be very difficult for one insurer to influence the market. "I don't think it is any secret that AIG has been reducing prices, but so have others," he said. "I think there is much more going on."