Commercial insurance rates across the U.S. adjusted downward in June
Commercial insurance rates across the United States declined last month to plus 2 percent for the month of June. In May of this year the rates were at plus three percent. According to Richard Kerr, CEO of Dallas-based insurance exchange MarketScout which analyzes market conditions on a monthly basis, the trend is a natural result of improved underwriting and capacity amounts.
“The commercial market continues to adjust downward as a result of improved underwriting results and an abundance of capacity. In the aggregate, rates are still up slightly but the trend for rate moderation continues.”
In analyzing the commercial insurance market conditions, MarketScout reviews rate trends by coverage class, account sizes and industry classes. Looking at the trends in coverage class for the month of June, umbrella, workers’ compensation, D&O, and EPLI all saw a moderation in their rates with each class registering a 1 percent rate increase. MarketScout did note that workers’ compensation rates have adjusted the most over the last two months moving from plus three percent in May to plus 1 percent in June.
In terms of commercial rates by account size, small and medium accounts did not move remaining at plus 3 percent. Large accounts, however, those that are over $250,000 adjusted from plus 2 to plus 1 percent, while jumbo accounts which are those over a $1,000,0001 remained flat. According to Kerr, this was a first for jumbo accounts since the recovery from the Great Recession began.
“This is the first plus 0 percent measurement since the market turned towards rate increases in November 2011. It’s not surprising the jumbo accounts have gone flat as the name brand account continues to allure underwriters despite the lower ROE. There is a pricing benefit to being a name brand, Fortune 1000 insurance buyer.”
A look at the rate trends by industry class shows that manufacturing, transportation and energy all adjusted downward by 1 percent.
An in-depth look at the numbers
By Coverage Class | |
Commercial Property | Up 3% |
Business Interruption | Up 1% |
BOP | Up 3% |
Inland Marine | Up 1% |
General Liability | Up 3% |
Umbrella/Excess | Up 1% |
Commercial Auto | Up 3% |
Workers’ Compensation | Up 1% |
Professional Liability | Up 2% |
D&O Liability | Up 1% |
EPLI | Up 1% |
Fiduciary | Up 1% |
Crime | Up 1% |
Surety | Up 1% |
By Account Size | |
Small Accounts | Up 3% |
Up to $25,000 | |
Medium Accounts | Up 3% |
$25,001 – $250,000 | |
Large Accounts | Up 1% |
$250,001 – $1 million | |
Jumbo Accounts | Up 0% |
Over $1 million | |
By Industry Class | ||
Manufacturing | Up 2% | |
Contracting | Up 3% | |
Service | Up 2% | |
Habitational | Up 2% | |
Public Entity | Up 1% | |
Transportation | Up 3% | |
Energy | Up 2% | |