May found average P&C rates adjusting upward, increasing by four percent, with personal accounts adjusting upward slightly as well, according to
Assessed by coverage class, commercial property and workers’ comp saw the biggest gains last month, five percent; Fiduciary, crime and surety saw the smallest at one percent. When broken down by industry class, the majority experienced four percent jumps, including manufacturing, contracting, habitational and transportation, with the rest seeing three percent growth.
The real breadwinners last month were small (up to $25,000) and medium ($25,001 to $250,000) commercial accounts, which each experienced four percent growth. Jumbo accounts (over $1 million) were nearly stagnant at one percent growth.
According to Richard Kerr, CEO of MarketScout: “It’s not unusual for underwriters to aggressively price jumbo accounts because of the cache they bring. Fortune 100 show pony accounts bring bragging rights but sometimes the rates do not justify the exposure. It is difficult to compare rates with smaller accounts because jumbo accounts frequently implement high retentions, captive involvement and heavy reinsurance.”
While small commercial accounts experienced a boon, personal lines saw consistent, if still tepid, growth.
All four segments of personal lines denoted in MarketScout’s report—homeowners below $1 million in value, homeowners with more than $1 million in value, automobile and personal articles—experienced two-percent increases.
“As wind season approaches, the rates in coastal areas are increasing with many admitted insurers pulling back,” Kerr noted. “The actual effective rate is higher than measured on a renewal-versus-expiring basis because many of the new quotes do not include as much coverage and implement higher deductibles.”
