Dr. Jekyll and Mr. Hyde are alive and well and calling themselves the U.S. commercial property insurance market.

That's the clear message from risk managers and brokers who are trying to negotiate the current midyear renewal season. Catastrophe-exposed Florida and Gulf Coast properties continue to feel the backlash of two violent hurricane seasons as prices rise and capacity shrinks. But commercial property accounts in other parts of the country can still wrest rate reductions from underwriters willing to write anywhere but the hurricane zone and the California earthquake belt.

"This market really resembles a drunken sailor," said Alexandra Glickman, area vice chairman for Arthur J. Gallagher Risk Management Services in Glendale, Calif. "It's swinging wildly, and it doesn't care who it hurts. It is having significant impact on acquisition deals, particularly in Tier 1 wind, and California earthquake is being punished because of the fact that catastrophe reinsurance is all part of the same pool," she said.

Ms. Glickman said that Tier 1 wind exposures include all of Florida and much of the Gulf Coast.

"This market is absolutely a split personality," said Ms. Glickman. "Every part of the country that is not Tier 1 wind, New York terrorism or California quake is going along" without knowing there's any crisis in the property market.

"If you're not on the coast and you're outside traditional cat-exposed areas, the market is simply falling over itself to write those risks," said Suzanne Douglass, managing director-North American property practice for Willis North America in New York. "If you're a Midwest account, even if you might have some tornado exposure, there is a significant appetite for those risks."

"If you were a buyer in Indiana, it would be a very pleasant experience compared to a buyer in Miami, with all the normal caveats," said Gary Thompson, senior vp in the middle market division of the Hartford Financial Services Group Inc. in Hartford, Conn.

Hartford was one of eight national insurers asked to comment on the midyear property renewal situation. Only one other--Factory Mutual Insurance Co.--responded in time for inclusion in the story, and three declined outright.

"We are increasing wind deductibles," as well as following stricter underwriting guidelines, said Mr. Thompson. He said deductible guidelines are "very fact-based, in other words, verifiable" concerning construction factors and other loss control issues.

"To some extent, we see the reaction being concentrated on (some) specific soft industries," Ms. Douglass said. "I would list among those retail, hospitality, health care institutions, non-industrial risks--because of the nature of the risk, these folks follow the population. As the population grows in coastal areas or quake prone areas, they're following that customer base."

"For complex risk placements, it is really a tale of two different markets," said Aaron Davis, director of Aon Corp.'s national property practice in New York. "That split is really based on whether the client has a portfolio of risks that would include critical catastrophe exposures."

Three major forces are driving this market--rating agency pressures, increased reinsurance costs and questions about the validity of catastrophe models, Mr. Davis said.

Bradley R. Wood, senior vp-risk management for Bethesda, Md.-based Marriott International, shared that assessment. "The financial rating agencies and the new cat models are really driving underwriters to rethink their overall aggregation exposures," he said.

"'Painful' would be the best description of the cat property insurance market," said Mr. Wood, who renewed the major part of Marriott's property program on April 1 and its time-share property program on June 1.

"Every week seemed to bring a tighter market," Mr. Wood said. "Unlike the months following 9/11, in which prices skyrocketed for terrorism insurance, post-Katrina has adversely impacted virtually every line of catastrophic coverage. One would have expected challenges with wind" but earthquake and terrorism coverage dealt risk managers a double blow of higher prices as capacity shrank, he said.

Scott Clark, risk and benefits officer for the Miami-Dade County Public Schools in Miami, said he felt a similar blow when he renewed the district's property program on May 1. "If you look at Lloyd's as one player," the complicated program involves 17 insurers, he said. The system has a total insured value of about $6.8 billion, but is concentrated in one county.

The expiring program had "$700 million worth of coverage, and last year my reported values were right at $6 billion," he said. "My windstorm deductible was 3% of values per location with a $1 million minimum deductible."

But this year's renewal "was only able to secure $200 million for windstorm and my deductible went from 3% of value per location to 4%" with a minimum deductible of $25 million per loss. Last year's program cost about $24.5 million vs. this year's $30 million, Mr. Clark said. Within the $200 million program, the board must participate as a quota-share coinsurer in the amount of $8.75 million on the primary $50 million cover, and slightly more than $5.41 million on the $50 million in excess of $50 million. "We couldn't find enough capacity to close in those holes," he said.

John Phelps, director-risk management for Blue Cross & Blue Shield of Florida in Jacksonville, also reported a less-than-friendly market for property coverage that renewed June 1.

"We found two things that are not surprising: Windstorm deductibles are off the scale and a tremendous increase in the windstorm retentions that have been foisted upon us," said Mr. Phelps. "Where we found a problem was the excess: I could place it all except for windstorm. We found pricing on windstorm at the excess layers (was) extraordinary--exponential underwriting must have been applied to this."

He said the Blues had to take a "50% franchise deductible" coinsurance above the primary layer.

Some excess layers were two to three times expiring prices with the largest increases in buffer or middle excess layers, Aon's Mr. Davis said.

Since Jan. 1, Gallagher's Ms. Glickman said Tier 1 wind exposure capacity "has been sliced to $100 million to $150 million if you're fortunate."

She called pricing "obscene," but said it could get worse. "If we end up with the type of hurricane season that's predicted, then catastrophic insurance as we know it will have been changed for the foreseeable" future, Ms. Glickman said. "Wind could easily become aggregated like California earthquake."

Outside catastrophe-exposed areas, the pricing trend "is generally up," but modest 5% to 10% rate increases have been the norm, said Randy Schreitmueller, vp at Johnston, R.I.-based Factory Mutual Insurance Co., which does business as FM Global.

The year started out "fairly competitive," said Mr. Schreitmueller, but changes became evident in the second quarter. "If you look at what happened in natural catastrophe exposures, a lot of insurers basically blew their aggregate limits--we weren't among them. We didn't have to restate our results, so we were not one of those insurers who is having to fix things."

Policyholders without catastrophe exposures don't have to fix much, either.

Terry Fleming, director-division of risk management for Montgomery County, Md., in Rockville, was still negotiating the county's July 1 property renewal but had heard of noncatastrophe exposed accounts facing small increases or even decreases. "We're in that range of minus 5 to plus 10. I'm hopeful we're going to come out with a flat renewal--and in this day and age, that would be great," he said.

The situation is even more buyer-friendly in the Midwest, said Rich Yarborough, a vp in the Cleveland office of Toledo, Ohio-based brokerage Hylant Group Inc.

"I have several large accounts with Midwest exposures," said Mr. Yarborough. "For the first half of the year and for some renewals that we're negotiating for July 1," property accounts have renewed at a flat or even reduced rates, he said. "There's just a lot of competitive pressure for underwriters to balance their books with some noncat exposed" accounts, he said.

Mr. Yarborough cited two accounts' experience as examples. One, an account with 80% of its exposure in the Midwest, 10% in Florida and 10% California had to pay 50% more for California quake coverage as well as take an increased deductible for the Florida windstorm exposure. Despite those increases, the account saw an overall 30% reduction in its property costs.

On an Ohio-based account that was up for bid on a July 1 renewal, "from what we understand we have to beat a 15% rate reduction if we're going to win the account," he said. "And there's a good possibility we've got some markets willing to do that."

Nevertheless, "a lot of buyers are under stress," said FM Global's Mr. Schreitmueller. "If there's a silver lining, I think buyers are much more receptive to risk improvement than they were previously."

But looking ahead, buyers remain wary.

"If we have another season similar to '04 or '05, I have serious concerns about our ability to place windstorm at all," said the Blues' Mr. Phelps.