July Composite Rate for US P&C Insurance Minus 1 Percent

Mar Bar CL

Insurers reassessing selected industries

The composite rate for property and casualty insurance placements across the United States held steady at minus 1 percent in July 2016, matching the minus 1 percent in June 2016.

Richard Kerr, CEO of MarketScout, profiled the results by noting, “While insurers continue to grant minor rating concessions, many are pushing for an end to any further rate reductions. Transportation underwriters are increasing pricing on all but the very best accounts. The poor loss experience in transportation has prompted underwriters to demand rate increases and restrict underwriting appetite. Insureds who cannot convince underwriters they can control losses are left with few options and ultimately end up paying a much higher rate/premium which impacts their profit margins.”

Kerr continued, “For the first time in a while, we are hearing from insureds, mostly in the transportation industry for now, who are complaining about lack of cooperation from insurers as they try to manage their risk portfolio. Business owners and corporate CEOs are concerned their insurance premiums will be larger than what was budgeted therefore negatively impacting net profits. These insureds would be well advised to allocate capital towards implementing loss control and companywide safety programs. That is how they will get cooperation from their insurers.”

Reviewing rates by coverage classification when comparing June 2016 to July 2016 reveals workers compensation and property coverages were the most aggressively priced at minus 2 percent. Business interruption, business owners policies (BOP), fiduciary and D&O all moderated by moving rates from minus 1 percent to flat, or no increase. Professional liability rates moved from down 2 percent to down 1 percent. Rates for all other coverages were unchanged.

There were no rate adjustments by account size from June 2016 to July 2016.

By industry classification, rates for public entities moved from minus 1 percent in June 2016 to flat or no increase in July 2016. Transportation accounts were assessed at the largest rate increases from up 1 percent in June 2016 to up 3 percent in July 2016.

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

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

(Click to view larger image.)


By Account Size
 
Small Accounts
Up to $25,000
Down 1%
Medium Accounts
$25,001 – $250,000
Down 1%
Large Accounts
$250,001 – $1 million
Down 2%
Jumbo Accounts
Over $1 million
Down 3%

(Click to view larger image.)


By Industry Class
 
Manufacturing
Down 2%
Contracting
Down 1%
Service
Down 1%
Habitational
Down 2%
Public Entity
Flat
Transportation
Up 3%
Energy
Down 1%

(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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