June Personal Lines Rates in the U.S. Up 4%
As the market enters the pre-wind season and with personal lines insurers bracing for what is predicted to be an active hurricane season, rates on average in the personal lines sector increased 4 percent last month.
“We are seeing an increased interest in the high net-worth space. There are two major insurers considering moving into high-net-worth in a meaningful way.. If they do, the increased competition could have an impact on rates.,” said Richard Kerr, CEO of MarketScout, the private insurance exchange which tracks the monthly rates for both personal and commercial lines. But, he cautioned, “Don’t get too excited about the new entrants. The high-net-worth space is tough to handle. It takes an enormous amount of capital and exceptional talent. Not many companies can fulfill those requirements. We expect any new entrants to tread lightly for the first year or two as they try to determine their place in the market.”
As specific increases within the personal lines sector, homeowners policies valued at both under $1 million and over $1 million increased four percent while automobile policy rates also increased by four percent. Personal articles saw a more modest increase of two percent.
Commercial Lines Pricing Also Settles In For Summer
Surveying the market factors for June, MarketScout set the composite P&C rate for commercial property and casualty insurance in the United States at plus 5 percent.
Overall, all the major coverages, industry sizes and account sizes remained within a plus 1 to minus 1 range as compared to May 2013 figures.
“The market is steady right now,” noted MarketScout CEO, Richard Kerr. “There were no big surprises in July 1 treaty renewals and even the impact of Superstorm Sandy seems to have been forgotten by most property insurers.”
Turning the rate increases by coverage classification, commercial auto saw the highest rate increase at plus six percent. Following commercial auto, were property, general liability, D&O and EPLI with increases of five percent. Marketscout says that EPLI has made the most significant upware rate adjustment in the last four months.
In terms of accounts, small accounts or those valued under $25,000 rose the largest by logging a six percent increase. Large or jumbo accounts which are those over $1,000,000 in premium saw the best composite rates which were at plus two percent.