Property, auto lead commercial rate increases

Commercial lines rates rose in November, reflecting slow growth in the third quarter as some products and industries lead the way.

Property, auto lead commercial rate increases

Insurance News


US commercial insurance rates continue to grow slowly, up an average 1% in November, a report from the MarketScout insurance exchange shows.

By class, the only significant positive movement occurred in commercial property and commercial auto coverage, which both grew a percentage point to +2%. Different industry classifications also showed positive movement, with service and transportation both increasing one percentage point from October to +2% and +3%, respectively.

Surety was the only coverage class to decline or remain flat, down +1%, and contracting accounts represented the largest industry decline, down from +3% to +2%. Manufacturing risks also saw a drop from +2% to +1%.
By account size, small accounts (up to $25,000) and medium accounts ($250,001 to $1 million) were up 2%, while large accounts were up 1%. Jumbo accounts remained flat.

“We still have not measured any line of business that registers a rate decline as compared to the prior year,” said MarketScout CEO Richard Kerr. “Surety rates and jumbo accounts are flat. Every other measurement is still showing at least a very slight rate increase.”

Full MarketScout results include:
By Coverage Class
Commercial Property Up 2%
Business Interruption Up 1%
BOP Up 2%
Inland Marine Up 1%
General Liability Up 2%
Umbrella/Excess Up 2%
Commercial Auto Up 3%
Workers’ Compensation Up 1%
Professional Liability Up 2%
D&O Liability Up 2%
EPLI Up 2%
Fiduciary Up 1%
Crime Up 1%
Surety Up 0%
By Industry Class
Manufacturing Up 1%
Contracting Up 2%
Service Up 2%
Habitational Up 1%
Public Entity Up 1%
Transportation Up 3%
Energy Up 2%
The results fall in line with an overall third quarter growth of 3%, as tracked by Towers Watson’s Commercial Lines Insurance Pricing Survey (CLIPS). Price changes are nearly at the same level as last quarter, following a trend of moderation in five consecutive quarters.

“After many quarters of moderation in price increases, we are seeing a lull,” said Alejandra Nolibos, director in Towers Watson’s Americas P&C practice. “We are seeing this for many of the lines surveyed, but I would highlight property. Last quarter, we noted price changes for that class had reached negative territory; recent data, however, indicate flat pricing. Increases in workers compensation pricing, on the other hand, continue to moderate.”
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