August is traditionally a slower month for insurance renewals and this year was no exception. The August composite rate for the commercial P&C market held steady at plus-4 percent, matching the index for July, according to this month’s MarketScout Rate Index. Meanwhile the U.S. personal lines market suffered from wildfire and flood claims, but the impact was not significant enough to knock the composite rate, which held steady at plus-3 percent.
“With no wind, no quake, and no big cat exposures looming, insurers are happy to sit tight and hold the status quo,” said Richard Kerr, MarketScout CEO. “August is often a slow month with few significant renewals so it is not unusual to see a static market.”
By commercial coverage classification, business owners (BOP) policy pricing increased from plus-4 percent to plus-5 percent. General liability also increased at plus-6 percent, up from plus-5 percent in July. Inland marine, commercial auto, D&O and surety all moderated, with rates down 1 percent from the prior month.
Small accounts (up to $25,000 premium) moderated from plus-6 percent to plus-5 percent. Medium sized accounts ($25,001 to $250,000) increased 1 percent to plus-6 percent. Large account rates held steady at plus-3 percent and jumbo accounts at plus-2 percent.
For personal lines, homes with a value of less than $1,000,000 received a 4 percent rate increase; homes with a value of more than $1,000,000 had an increase of plus-3 percent. Automobile and personal articles floaters were also steady at plus-3 percent and plus-1 percent respectively.
“August is a slow month for personal lines insurers,” Kerr said. “Many insureds are on holiday and as a result, fewer policies are set to renew. So, much like the stock market, there normally isn’t a lot of volume or movement in the personal lines market in August.”
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