A quarterly look at rates courtesy of MarketScout
Personal lines rates remained steady during the start of 2017, according to the most recent data from national MGA and wholesale broker MarketScout.
“Insurers have done a good job forecasting losses so premiums are relatively stable,” explained Richard Kerr, CEO of MarketScout. “Homes valued at less than $1,000,000 have most recently produced a less attractive return on equity for insurers as compared to placements for homes over $1,000,000. As a result, rates for homes under $1,000,000 in value increased 3 percent while rates for larger homes were up 2 percent. Most larger homes are linked to high net worth clients who tend to be a preferred class of insureds. The overall account premiums of these clients are larger and they buy three or four lines of coverage.”
Each quarter, the company analyzes market conditions via pricing surveys conducted by the National Alliance for Insurance Education. The following is a rundown of the personal lines market:
|Homeowners under $1,000,000 value||Up 3%|
|Homeowners over $1,000,000 value||Up 2%|
|Personal Articles||Up 1%|
Commercial Lines also see an increase for the first time in almost two years
In a similar vein, U.S. Commercial Lines rates also saw an increase in rates for the first time in 20 months, measuring at plus 1 percent.
In commenting on the first quarter rate environment, Richard Kerr, CEO of MarketScout said “The plus 1 percent composite rate index was driven by larger rate increases in commercial auto, transportation, professional and D&O rates. We also recorded small rate increases in the majority of coverage and industry classifications. So, 2017 begins with insurers moving away from the rate cuts of 2016.”
More about the various coverage classes:
According to MarketScout, the following rates remained steady in the first quarter: business interruption, inland marine, workers’ compensation, crime, and surety coverages. As for the remaining rates, all the other coverages listed either moderated or increased.
Turning to a look at the rates by industry class, MarketScout says that every industry listed experience moved toward higher rates in the first quarter. As for the highest rate increase, that was transportation.
By account sizes, small accounts received a 1 percent rate increase the first quarter, while medium accounts were flat. In comparison, both large and jumbo accounts saw rate decreases of minus 1 percent and minus 2 percent respectively.
By Coverage Class
|Commercial Property||Down 1%|
|Inland Marine||Down 1%|
|Commercial Auto||Up 3%|
|Workers’ Compensation||Down 2%|
|Professional Liability||Up 2%|
|D&O Liability||Up 2%|
By Account Size
|Small Accounts||Up 1%|
|Up to $25,000|
|$25,001 – $250,000|
|Large Accounts||Down 1%|
|$250,001 – $1 million|
|Jumbo Accounts||Down 2%|
|Over $1 million|
By Industry Class
|Public Entity||Up 1%|