The composite rate for U.S. P&C commercial lines increased to plus-5 percent in September 2013 from plus-4 percent in August, according to the MarketScout Barometer.
“There are several medium sized publicly traded insurance companies who are encountering challenges in their ongoing business operations,” said Richard Kerr, CEO of MarketScout. “These companies may be sold, restructured, or placed into run off unless they structure some creative solutions to get them past their current financial crisis. Very capable, smart insurance executives lead each of these firms. It just goes to show how quickly things can go wrong if an insurer experiences adverse loss development. Rates will increase if a few more companies experience similar deterioration.”
Larger accounts typically have paid less premium than smaller accounts, and that also was true in September; small accounts, those with up to $25,000 premium, incurred average rate increases of 6 percent. Medium accounts, those with $25,001 to $250,000 premium, incurred average rate increases of 5 percent. Large accounts, those with $250,001 to $1,000,000 premium, incurred average rate increases of 3 percent; jumbo accounts, those with more than $1 million premium increased 2 percent.
At plus-6 percent, contractors paid the highest rate increases; next were habitational, service and transportation accounts, which increased by plus05 percent. Public entities, at plus-3 percent, had the smallest increase.
Commercial property and general liability coverages increased by 6 percent. Automobile and business owners policies were up 5 percent, MarketScout said. The coverage classification with the smallest increase was surety, at plus-1 percent.
MarketScout uses pricing surveys from the National Alliance for Insurance Education and Research for the analysis. The surveys are used to further corroborate MarketScout's actual findings, which are mathematically driven by new and renewal placements across the United States, the company said.
September 2013 rates increases:
By Coverage Class
Commercial Property: Up 6 percent
Business Interruption: Up 3 percent
BOP: Up 5 percent
Inland Marine: Up 2 percent
General Liability: Up 6 percent
Umbrella/Excess: Up 4 percent
Commercial Auto: Up 5 percent
Workers’ Compensation: Up 4 percent
Professional Liability: Up 3 percent
D&O Liability: Up 4 percent
EPLI: Up 4 percent
Fiduciary: Up 3 percent
Crime: Up 2 percent
Surety: Up 1 percent
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