Commercial Insurance Rates Hold Steady; Personal Lines Decrease

The commercial insurance composite rates barely matched year-end 2013 at plus-3 percent, while personal lines rates decreased in January from plus-3 percent to plus-2 percent, according to the MarketScout barometer.

“Rates for five coverage classes declined 1 percent as compared to one year ago,” said Richard Kerr, CEO of MarketScout. “No coverage classifications had a rate increase. By account size, half the accounts measured enjoyed premium reductions of 1 percent. By industry class, four out of seven were down 1 percent. If we were to post rate changes by fractional increments, you would see the actual increase at 2.55 percent, so the moderation trend continues.”

Automobile and personal articles floaters were both at plus-2 percent, a slight reduction for personal articles and the same rate for automobile.

January 2014 rates by coverage class:

January 2014 rates by account size:

“2013 was a good year for personal lines insurers,” Kerr said. “We expect continued aggressive pricing, but that will be geographically modified as appropriate. Coastal homeowners continue to enjoy competitive rates because of the lack of windstorm activity in 2013, despite Superstorm Sandy.”

Homes valued at less than $1,000,000 were assessed a 2 percent increase; high value homes, those valued at more than $1,000,000, paid an additional 4 percent. Both metrics were down 1 percentage point from December 2013, according to the report.

January 2013 personal lines rates:

MarketScout's analysis of market conditions is based on pricing surveys conducted by the National Alliance for Insurance Education and Research, which are used to corroborate MarketScout's findings, which are mathematically driven by new and renewal placements across the United States.