Average US Personal Lines Composite Rate Up 3% in Fourth Quarter 2017 says MarketScout in its quarterly report
The U.S. composite rate for all personal lines placements ended the year 2017 with a plus 3% in the fourth quarter. This was up from plus 2 percent in the third quarter.
We are seeing different rates in different geographical areas,” explained Richard Kerr, CEO of MarketScout. “Insureds with homes in catastrophe prone areas, particularly those who suffered losses in the 2017 wind season were hit with the highest rate increases. Some increases were as much as 15 percent.”
As a result, according to this quarter’s report:
-
- The composite homeowners rates for homes of all values was plus 4 percent in the fourth quarter 2017.
- Auto insurance was up from plus 2 percent in the third quarter 2017 to plus 3 percent in the fourth quarter of 2017.
- Personal articles and fine art remained steady at plus 1 percent.
Each quarter, Dallas-based MarketScout compiles the composite rate for both the personal and commercial lines marketplace by analyzing market conditions via pricing surveys conducted by the National Alliance for Insurance Education. The personal lines rates are then calculated using both mathematical formulas and in-person market surveys.
Personal Lines |
|
| Homeowners under $1,000,000 value | Up 4% |
| Homeowners over $1,000,000 value | Up 4% |
| Automobile | Up 3% |
| Personal Articles | Up 1% |
Another increase in Commercial lines rates in Q4 rounds out 2017
After a plus one increase in Q3, the fourth quarter of 2017 has seen additional rate adjustments for the U.S. property and casualty insurance composite rate which was plus 2% in the last quarter of the year.
In commenting on the trend, Richard Kerr, CEO of MarketScout said, “Underwriters are rarely surprised by aggregate losses because they have so many pricing and modeling tools. Most insurers are assessing rate increases at a moderate pace. Automobile and transportation accounts incurred the largest rate increases at plus 5 percent over prior year pricing.”
Kerr added, “Keep in mind, rates are calculated on a composite basis and represent exposures from businesses across the US. Insureds in catastrophe exposed areas incurred higher rates/premiums.”
Underwriters Utilize Modeling and Pricing Tools says MarketScout
According to MarketScout, as a result of the events in 2017, all coverages, except D&O, professional liability and auto had rate increases from the third to the fourth quarter of 2017. The largest increase occurred in property which rose from plus 1% to plus 3%.
MarketScout notes that on average, underwriters assessed rate increases for almost all industry groups in the last quarter of 2017, except for transportation and public entities.
By Coverage Class |
|
| Commercial Property | Up 3% |
| Business Interruption | Up 2% |
| BOP | Up 2% |
| Inland Marine | Up 1% |
| General Liability | Up 2% |
| Umbrella/Excess | Up 2% |
| Commercial Auto | Up 5% |
| Workers’ Compensation | Down 1% |
| Professional Liability | Up 1% |
| D&O Liability | Up 1% |
| EPLI | Up 2% |
| Fiduciary | Up 1% |
| Crime | Up 1% |
| Surety | Up 1% |
By Account Size |
|
| Small Accounts | Up 2% |
| Up to $25,000 | |
| Medium Accounts | Up 2% |
| $25,001 – $250,000 | |
| Large Accounts | Up 2% |
| $250,001 – $1 million | |
| Jumbo Accounts | Up 1% |
| Over $1 million | |
By Industry Class |
|
| Manufacturing | Up 1% |
| Contracting | Up 2% |
| Service | Up 1% |
| Habitational | Up 3% |
| Public Entity | Up 1% |
| Transportation | Up 5% |
| Energy | Up 1% |
