Commercial and personal insurance lines pricing continued their upward drive through the month of June as composite rates matched the previous month’s increases, according to the latest MarketScout barometer.
The June commercial rate barometer says average commercial property and casualty rate increases rose by 4 percent, matching May’s increase, while personal lines composite rose 2 percent, matching last month’s increase.
“We did record rate moderation for workers’ compensation accounts from plus 5 percent in May to plus 4 percent in June,” says Richard Kerr, chief executive officer of the Dallas-based electronic insurance exchange in a statement. “The market for workers’ compensation is ‘bumpy’ as insurers try to settle in at appropriate pricing. Accounts with class codes related to high hazard exposures are being assessed considerable rate increases of plus 7 percent to plus 15 percent. Traditional Main Street workers’ compensation accounts are renewing as expiring to plus 2 percent.”
MarketScout says contracting and habitational lines pricing increased from plus 4 to plus 5 percent.
Service contractors insurance increased from plus 3 to plus 4 percent while public entities actually decreased from plus 3 to plus 1 percent.
By account size, small and medium accounts were up 4 percent. Large Accounts, between $250,000 and $1 million in premium, were up 3 percent. Jumbo accounts, over $1 million in premium, were up 1 percent.
In an analyst’s note, Meyer Shields with Stifel Nicolaus says of the report’s indicators, “We see insurers’ deteriorating calendar-year results as the primary catalyst for rate increases, and we expect these increases to accelerate as favorable reserve development subsides and accident-year results edge worse.”
On the personal lines side, Kerr notes, “Insurers continue to aggressively price homeowners exposures to non-cat areas. Those homes in [catastrophe] areas such as California, and in particular Florida, and other hurricane exposed areas are being assessed rate increases of 7 to 12 percent, which is slightly up from earlier in the year. Normally, as we enter the wind season, coastal rates trend upward.”
On a composite basis, MarketScout says homes valued at over $1 million had rate increases of 1 percent. Homes under $1 million, auto and personal articles floaters had rate increases of 2 percent.