Two separate market surveys point to a continuing decline in commercial property/casualty insurance rates.
Online insurance exchange MarketScout reported that the composite rate for p/c business placed in the United States declined by 4 percent in January 2016.
Richard Kerr, CEO of MarketScout, noted that commercial property rates dropped from minus 2 percent in December 2015 to minus 5 percent in January 2016.
Business interruption, BOPs, professional liability and D&O coverages were also more competitively priced in January 2016 versus December 2015, MarketScout said.
By account size, large and jumbo accounts (over $250,001) were assessed rates slightly higher in January 2016 than in the prior month–bucking the usual trend, while rates for small and medium sized accounts (all under $250,000) were more competitive.
Meanwhile, the Council of Insurance Agents & Brokers’ (The Council) fourth quarter Commercial P/C Market Index Survey showed that 2015 closed as it began–with continued decreases in commercial p/c rates.
All size accounts experienced decreases in the fourth quarter of 2015, consistent with the downward trend seen in the prior three quarters. Large accounts saw the biggest decrease at 3.7 percent, followed by medium-sized accounts at 3 percent, and small accounts at 1.5 percent, The Council said.
By line, the largest decreases were seen in commercial property, down 3.5 percent, and general liability, down 3.4 percent. Umbrella policy rates declined an average of 2.8 percent while workers compensation rates were down an average of 2.6 percent.
Ken A. Crerar, president/CEO of The Council noted:
This soft market presents both challenges and opportunities for brokers. Lower rates meant less revenue but as the economy improved, policyholders were seeking increased limits and additional lines of coverage. This gave our members a chance to be creative and provide added value to their clients beyond just negotiating lower rates.”
The Council will continue to monitor how trends and advancements like industry consolidation, the burgeoning cyber insurance market and the use of technology in modeling and underwriting impact rates and capacity in the insurance market in 2016.
Insurance Information Institute commentary on the p/c industry financial results can be found here.