In response to tough economic times, insurance companies are scrambling for business from pool and spa firms, with many lowering their premiums.

A poorly performing stock market, and an increase in layoffs and bankruptcies across multiple industries have forced many insurance firms to cut prices in an attempt to maintain profitability.

“[There’s] a price war right now,” said Ray Arouesty, president of Arrow Insurance Service in Simi Valley, Calif.

Over the past year, premium prices have dropped 40 percent to 45 percent, he added.

One pool builder in San Diego paid $12,000 to renew his policy this year, whereas last year the same coverage cost $30,000, according to Arouesty. And the owner of a service company had to pay 11 percent of his payroll toward workers’ compensation three years ago, whereas today, he’s seeing rates below 5 percent.

The trend has extended to other forms of insurance, such as auto premiums, Arouesty noted.

“In the past 12 months, the price war has heated up and accelerated,” he said. “I’m not seeing signs of it changing in the next year. We’re still going to have lower premiums.”

This development is seen as welcome relief for the pool and spa industry, which has been battered by the housing crisis, credit crunch, and increased costs for fuel and raw materials.

“Our builders are very happy,” Arouesty said. “Some of them ask us if it’s a mistake.”