Is the market starting to harden?

For some time now the insurers have been gloomy about 2008 and have been bracing for a softening of premium rates. Just today I have heard the first counter to that , a possible increase of 5% in commerical lines and that several insurers are considering such an increase. This could be wishful thinking plus an attempt to talk up the market, but if one of the reasons for falling premium rates is an excess of capital available to underwrite risks then perhaps we can give more credence to this report. Clearly the impact of the subprime mortgage debacle has been to suck enormous volumes of capital out of the market . So even if insurers are not, so most of them say, seriously affected by the sub prime problems they are also not facing the old problems of excess capital from the banking system looking for a quick return which has the effect of lowering premiums.