Personal Lines Composite Rates Rise By Three Percent
Overall, personal lines insurance rates across the nation have risen by three percent in May, according to MarketScout’s monthly analysis. The Dallas-based insurance exchange notes, however, that rates may vary by geographic location, account history and an individual insurer’s take on the probability of future losses.
Richard Kerr, CEO of MarketScout, outlined the current personal insurance market stating, “Large, admitted insurers control the vast majority of the US personal lines market. Because of their size and ability to withstand market trends, the large insurers don’t normally respond to unfounded price aberrations in any given market. A strong balance sheet enables these insurers to stick to their guns on a long-term basis. However, smaller insurers will vary pricing almost monthly, as permitted by respective state insurance regulations. Regardless, the volume of the larger insurers has a significant impact on the US personal lines composite rate. Thus, the reason for another month of steady results at plus 3 percent.”
Focusing on the national averages, homeowners insurance under $1,000,000 in Coverage A value saw a slight increase in rates from April to May, rising from plus three to plus four percent. Personal article floaters, however, saw rates adjust downwards over the past two months from plus two to plus one percent. As for homeowners’ coverage over $1,000,000 in coverage A value and automobile exposures, both rates remained unchanged from April at plus three percent.
Commercial Lines Composite Rate Follows Suit
Like the personal lines composite rates in May, the composite rate for U.S. property and casualty commercial lines was also up plus three percent in May. This is compared to April, in which the composite rate was up two percent.
“Frankly, this is a somewhat of a surprise.” Richard Kerr, CEO of MarketScout noted. “Market sentiment supports rate moderation. However, as we all know, trends bump along before establishing a true direction. Over time, a trend will be established.”
Summarizing the most interesting changes for May, by coverage class, property, businessowners policies (BOP) and general liability all saw an increase in from plus two to plus three percent. In turn, EPLI decreased from to plus two percent In terms of account size, medium accounts rose from plus two to plus three percent while large accounts went up from plus one to plus two percent.
In terms of industry class on Manufacturing and energy industries saw an average rate increase of plus three pecent while Service and habitation industries moderated down from plus three to plus two percent.
The following are charts highlight the rate trends by coverage class, account size and industry:
|
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 2% |
| Commercial Auto | Up 3% |
| Workers’ Compensation | Up 3% |
| Professional Liability | Up 2% |
| D&O Liability | Up 2% |
| EPLI | Up 2% |
| 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 2% |
| $250,001 – $1 million | |
| Jumbo Accounts | Up 1% |
| Over $1 million |
|
By Industry Class |
|
| Manufacturing | Up 3% |
| Contracting | Up 3% |
| Service | Up 2% |
| Habitational | Up 2% |
| Public Entity | Up 1% |
| Transportation | Up 4% |
| Energy | Up 3% |
