2016 Opens with 4 Percent Rate Reduction

Mar Bar CL

Commercial property rates drop significantly

The composite rate for property and casualty business placed in the United States measured minus 4 percent in January 2016.

“Commercial property rates dropped from minus 2 percent in December 2015 to minus 5 percent in January 2016,” stated Richard Kerr, CEO of MarketScout. According to Kerr, “Commercial property insurers are getting ready to scratch each other’s eyes out as they fight for market share. We see nothing to prevent commercial property rates from dropping further.”

In addition to commercial property, business interruption, BOPs, professional liability, and D&O coverages were all more competitively priced in January 2016 vs. December 2015. Umbrella/Excess liability and workers’ compensation rates actually increased slightly over the same period.

By accounts size, rates for small and medium sized accounts (all under $250,000) were more competitive in January 2016 than in the prior month. Large and jumbo accounts (over 250,001) were assessed rates slightly higher in January versus December.

Transportation companies were assessed rate decreases of 4 percent in January 2016 versus 2 percent in December 2015. Rates for manufacturing and energy accounts were slightly higher in January 2016 than in December 2015. All other industries remained unchanged.

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 January 2016 rates by coverage, industry class and account size is set forth below.

By Coverage Class
 
Commercial Property
Down 5%
Business Interruption
Down 2%
BOP
Down 1%
Inland Marine
Down 1%
General Liability
Down 2%
Umbrella/Excess
Down 3%
Commercial Auto
Flat
Workers’ Compensation
Down 3%
Professional Liability
Down 4%
D&O Liability
Down 2%
EPLI
Flat
Fiduciary
Down 2%
Crime
Flat
Surety
Down 1%

(Click to view larger image.)


By Account Size
 
Small Accounts
Up to $25,000
Down 4%
Medium Accounts
$25,001 – $250,000
Down 5%
Large Accounts
$250,001 – $1 million
Down 4%
Jumbo Accounts
Over $1 million
Down 3%

(Click to view larger image.)


By Industry Class
 
Manufacturing
Down 2%
Contracting
Down 3%
Service
Down 3%
Habitational
Down 5%
Public Entity
Down 3%
Transportation
Down 4%
Energy
Down 3%

(Click to view larger image.)


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 California, Connecticut, Florida, Illinois, Indiana, Michigan, Nebraska, New Jersey, Rhode Island, Tennessee, Texas and Washington, D.C.

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