Commercial rates increased 5 percent, while personal lines prices were up 4 percent last month, according to MarketScout’s monthly Market Barometer.
Richard Kerr, CEO of MarketScout, confirmed the commercial results noting, “Historically, underwriters have been very aggressive in pricing name brand or large accounts. Other than bragging rights, there are few sound underwriting reasons for aggressively pricing large accounts. Risk is risk and exposure is exposure. In March, underwriters more frequently assessed an appropriate premium for large accounts.”
MarketScout’s recent data showed a significant reversal in pricing strategy for both large ($250,001 to $1,000,000 premium) and jumbo (over $1,000,000 premium) accounts. In February, rate increases for large accounts measured plus 3 percent and for jumbo account plus 2 percent. These increases adjusted to plus 5 percent for both in March. “There is also a considerable amount of chatter amongst underwriters regarding pricing in this area so we will be monitoring the situation very carefully,” Kerr said.
Workers’ compensation, professional and small commercial all received more aggressive month-over-month price increases.
Manufacturing continues to post the largest rate increases as compared to prior year results followed by contracting, service, habitational, and transportation.
Meanwhile, across the United States, homeowners insurance is getting more expensive; insurers are adjusting rates as catastrophe modeling companies widen the areas that may be impacted by huge storms. “Homeowners in non-cat areas, such as New Mexico or Nevada, will enjoy renewals as expiring or perhaps even a slight rate decrease,” Kerr said. “However, if you live in a state that touches a coastal area, is prone to quakes, hail or tornadoes, you will pay more.”
Homeowners have been assessed a composite rate increase of plus-4 percent for homes valued less than $1,000,000 in value and plus-5 percent for homes valued at $1,000,000 and more.
Automobile rate increases were actually lower than the preceding month as up 2 percent. “There are so many solid auto insurers all competing for the monoline auto risk,” Kerr said. “This creates price competition, which results in lower premiums and package discounts for those insureds that place multiple lines with one insurer.”
Personal articles coverage remained unchanged at plus 3 percent.
