US P&C Rates Up 1% in February

Aberration?

In the US, the composite rate in 2015 for all property and casualty lines across all states was up 1 percent in February as compared to flat in January 2015.

"Could this mean underwriting executives are actually walking away from underpriced business?" questioned Richard Kerr, CEO of MarketScout.

Pricing measurements by coverage classification reflected no further price deterioration in any line and an increase of 1 percent in auto, professional liability, and EPI from plus 1 percent to plus 2 percent.

By account size, large accounts ($250,001 to $1,000,000 premium) increased from flat to plus 1 percent while all other account sizes remained the same as in January 2015.

When measuring by industry classification, contacting, habitational, public entity, and transportation all increased by 1 percent in February 2015 as compared to January 2015.

Kerr commented, "February is normally a low volume premium month so we would caution about putting too much credibility in these metrics; however, historically once the insurance market starts softening it normally accelerates rather than moderates or turns around. We speculate insurers are not going to cut deep and long in this cycle. Big data, modeling software and improved underwriting acumen are resulting in insurers simply being too smart to fall for extended and deep price cuts."

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.

A summary of the February 2015 rates by coverage, industry class and account size is set forth below.

By Coverage Class

Commercial Property

Up 1%

Business Interruption

Up 0%

BOP

Up 1%

Inland Marine

Up 0%

General Liability

Up 1%

Umbrella/Excess

Up 1%

Commercial Auto

Up 2%

Workers' Compensation

Up 0%

Professional Liability

Up 2%

D&O Liability

Up 1%

EPLI

Up 2%

Fiduciary

Up 0%

Crime

Up 0%

Surety

Up 0%

 
 Click image to enlarge

 

By Account Size

Small Accounts

Up 2%

Up to $25,000

Medium Accounts

Up 1%

$25,001 - $250,000

Large Accounts

Up 1%

$250,001 - $1 million

Jumbo Accounts

Up 0%

Over $1 million

 
Click image to enlarge

 

By Industry Class

Manufacturing

Up 0%

Contracting

Up 2%

Service

Up 1%

Habitational

Up 1%

Public Entity

Up 1%

Transportation

Up 2%

Energy

Up 0%

 
Click image to enlarge

 

For detailed rating analysis or market projections by industry class, coverage or account size, contact Vilma Scott at vscott@marketscout.com.


About MarketScout

MarketScout, an insurance distribution and underwriting company headquartered in Dallas, compiles the Commercial and Personal Lines Market Barometers. The firm owns and operates the MarketScout Exchange at marketscout.com as well as over 40 other online and traditional underwriting and distribution venues. MarketScout founded the Entrepreneurial Insurance Alliance (EIA) in 2009. In 2012, MarketScout founded the Council for Insuring Private Clients (CIPC). MarketScout has offices in Dallas, California, Connecticut, Florida, Illinois, Indiana, Michigan, Nebraska, New Jersey, Rhode Island, Texas and Washington, D.C.

 

 

The composite market conditions from 2001 to 2015 are set forth below.

 

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