After four months of rate increases at 5 percent, pricing in the property/casualty market moderated in July, increasing by 4 percent. Personal lines rates increases slowed to plus-3 percent for July 2013 as compared to plus-4 percent for June.
“Without any catastrophic events, it is natural to see the market drift downward,” said Richard Kerr, MarketScout CEO andfFounder of the Council for Insuring Private Clients (CIPC). “The market is quiet. Many underwriters, insurers and brokers are on holiday after securing their July 1 renewals. We will have a much better feel for where things are headed once the results are tabulated for September and October.”
Rate increases for commercial auto, workers’ compensation, D&O and EPLI all fell by 1 percent, compared to last month. The same goes for large account ($250,001 to $1,000,000 premium) rate increases, which also fell one point, to plus 3-percent from plus-4 percent in June.
By industry classification, every industry group except for public entity business, which includes manufacturing, contracting, service, habitational, transportation and energy, moderated by 1 percent. An exception was Fiduciary rates, which were plus-3 percent from plus-2 in June.
“Generally speaking, personal lines insurers are having a pretty good 2013,” Kerr said. “Of course, we have the wind season upon us, followed by possible brush fires in the west or even an earthquake at any time, so the possibility of catastrophic events still looms on the horizon. However, if there are no huge storms or brush fires by late October, this could end up a good year for the personal lines insurance industry. If so, rates will adjust downward a bit.”
For personal lines, high-value homeowners (more than $1 million), increased 3 percent compared to 4 percent in June; auto increased 3 percent compared to 4 percent in June and personal articles increased 1 percent compared to 2 percent in June. Rate increases for homes valued less than $1 million were plus-4 percent and unchanged from June.
The National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout's analysis of market conditions. These surveys help further corroborate MarketScout's actual findings, mathematically driven by new and renewal placements across the United States.
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