The Personal Lines Marketplace Saw a Three Percent Jump from October to November 2012
Market Scout, the Dallas-based electronic insurance exchange says that the that both markets showed an upward swing for November 2012. In the personal lines market, particularly, the effects of Hurricane Sandy were starting to be felt throughout the homeowners market.
“Homeowners placements for homes over $1,000,000, the ‘high-net-worth’ market, made a dramatic move in November,” stated Richard Kerr, CEO of MarketScout. “Rates moved up from plus 2 percent in October to plus 5 percent in November. That is the largest month on month rate increase we have seen in the eleven years we have been tracking rates in the U.S. It appears insurers of high value homes are adjusting rates upward to account for increased exposure to weather related events. And some of the accounts are now being forced into the non-admitted market where rates are higher and coverages are frequently restricted.
While homeowners coverage for placemements under $1,000,000 were up four percent, and homes over $1,000,000 were up five (5%) percent, automobile and personal articles also showed an uptick of three (3%) percent.
The following chart gives an at-a-glance explanation of the upward swing on the personal lines side.
On the On the Commercial Side, the November Composite P&C Rate Is Also Up Five Percent
The overall commercial lines composite rate also posted one of its largest increases in recent months with both transportation and manufacturing exposures leading the rate increases. Any way you look at, by coverage, industry class or account size, the composite rate for insuring commercial accounts was up five percent over the November 2011 numbers. The following chart outlines the premium trends by Coverage Class for November 2012:
By account size, commercial rates for small accounts up to $25,000 were up five (5%) percent, as wellas both Medium Accounts ($25,0001 -$250,000) and Larges Accounts ($250,001 – $1 million). Jumbo accounts were qualify at over $1 million were also up, by only by two (2%) percent, in comparison.
Looking at the trends by industry class, manufacturing and transportation showed the biggest increase with both classes posting a six (6%) percent increase over a year ago. Contracting, Service, Habitational and Energy were all up five (5%) percent, which Public Entity increased by four (4%) percent.
“The manufacturing rate increase was surprising,” said Richard Kerr, CEO of MarketScout. “Normally, manufacturing is a very stable industry class absent quick pricing changes. Going from plus 4 percent to plus 6 percent was unusual. As for transportation, the trucking segment of this industry class is what is really driving the rate increases for the class at plus 6 percent. The losses suffered by the trucking market have been considerable over the last several years. We expect further rate increases for trucking exposures.”
With an overall five (5%) percent increase, MarketScout sees the P&C rate increase in the commercial market continuing on onwards and upwards in the coming months.