Commercial insurance premium rates rose dramatically in 2000, according to a quarterly survey from the Council of Insurance Agents & Brokers (CIAB).

The CIAB, a Washington, D.C.-based trade association, reports in its January 2001 "Commercial Insurance Market Index" that 78 percent of commercial insurance brokers saw rate increases of more than 10 percent for medium-sized business accounts (those with $25,000 to $100,000 in fees and commissions) in the third quarter of 2000. Sixty-six percent report similar rate increases for large business accounts (those with more than $100,000 in fees and commissions).

The survey covers five property/casualty lines of insurance: auto insurance, workers compensation, property insurance, general liability, and umbrella coverage. It reports results for the year 2000 and for the last quarter of 2000.

Premiums for umbrella coverage hardened the least in 2000, with most brokers characterizing it as "somewhat hard" and 33 percent reporting no change in umbrella rates. Workers comp insurance rates hardened the most: 34 percent of brokers called rates "very hard" for workers comp, and 57 percent characterized them as "somewhat hard."

Group medical coverage costs also skyrocketed, with 60 percent of brokers reporting rate increases of 10 percent or more for medium accounts and 58 percent reporting the same increase for large accounts. A January 2001 study by Towers Perrin blames rising drug costs for the increase in group health premiums during 2000.

The CIAB Index is based on a survey of the 250 agents and brokers in CIAB's membership, who write 80 percent of commercial insurance premiums in the United States.