Marketscout announced true signs of an emerging hard market for the property/casualty industry. The industry showed consistent rate increases in 2012, ending the year with a 5-percent average rate increase on U.S. P&C business. This comes after seven years of a soft market.
"This market turn is not like the last hard market of 2001 to 2005 when rates spiked up as much as 30 percent in the early stages,” says Richard Kerr, CEO of MarketScout. “For the 2012 market turn, rates have adjusted slowly and steadily without any dramatic spikes. This slow and steady pace could foretell rate increases at a more sensible pace and for a longer period of time."
For December 2012, small accounts ($0 to $25,000 premium) were hit the hardest with rate increases at 6 percent, while jumbo accounts (more than $1,000,000) continued to enjoy the most competitive pricing at 3 percent. Measuring by industry, transportation, manufacturing, and service accounts continued with the largest rate increase at 6 percent.
Commercial auto lead the coverage classification in rate increases at plus 6 percent.
A summary of the December 2012 rates by class:
Commercial Property | +5% |
Business Interruption | +4% |
BOP | +4% |
Inland Marine | +3% |
General Liability | +5% |
Umbrella/Excess | +4% |
Commercial Auto | +6% |
Workers' Compensation | +4% |
Professional Liability | +4% |
D&O Liability | +4% |
EPLI | +3% |
Fiduciary | +2% |
Crime | +2% |
Surety | +1 |
The National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout's analysis of market conditions. These surveys help to further corroborate MarketScout's actual findings, mathematically driven by new and renewal placements across the United States.
