Continuing upward trend which saw U.S. Commercial Rates Rise Four Percent For February
According to MarketScout’s monthly analysis of the composite results of U.S. Commercial rates this month, it appears that placing accounts that command large premiums no longer means a more aggressive pricing strategy for those buyers.
“Historically, underwriters have been very aggressive in pricing name brand or large accounts,” explains Richard Kerr, the CEO of MarketScout. “Other than the cache or bragging rights, there are few sound underwriting reasons for aggressively pricing large accounts. Risk is risk and exposure is exposure. In March, underwriters more frequently assessed an appropriate premium for large accounts.
Our most recent data showed a significant reversal in pricing strategy for both large ($250,001 to $1,000,000 premium) and jumbo (over $1,000,000 premium) accounts. In February, rate increases for large accounts measured plus 3 percent and for jumbo account plus 2 percent. These increases adjusted to plus 5 percent for both in March. There is also a considerable amount of chatter amongst underwriters regarding pricing in this area so we will be monitoring the situation very carefully.”
An in-depth look at the numbers
As a result of the current trends, worker’s compensation, professional and small commercial all received more aggressive price increases. Overall, however, manufacturing continues to post the largest rate increases followed closely by contracting, service, habitational and transportation.
|By Coverage Class||Rate Change|
|Commercial Property||Up 5 %|
|Business Interruption||Up 3%|
|Inland Marine||Up 3%|
|General Liability||Up 4%|
|Commercial Auto||Up 5%|
|Workers’ Compensation||Up 5%|
|Professional Liability||Up 3%|
|D&O Liability||Up 3%|
|By Industry Class||Rate Change|
|Public Entity||Up 4%|
|By Account Size||Rate Change|
Up to $25,000
$250,001 – $1 million
Over $1 million