Entries tagged with “MarketScout”.


While the composite rate for U.S. commercial property and casualty insurance remains positive, at plus 1 percent in August, it is closing in on flat or no increases and rate reductions are coming, according to online insurance exchange MarketScout.

Richard Kerr, CEO of MarketScout commented:

Insurers really don’t want to enter another era of rate declines; but in order to hold business, most of the market is being forced to moderate pricing. If this trend continues, we should see annual rate declines very soon.”

Aug2014_Barometer_Commercial

The key takeaways from MarketScout’s latest analysis:

– Property rates were actually up slightly at plus 3 percent in August.

– Business interruption was down one percent to flat, as were fiduciary and crime.

– Business owners’ policies and commercial auto moderated from plus 3 percent to plus 2 percent.

– Umbrella liability coverage moderated from plus 2 percent to plus 1 percent.

– Workers compensation rates were up from plus 1 percent to plus 2 percent.

– Rates as measured by account size and industry classification remained the same as in July 2014.

Bear in mind that August is traditionally a slower month for insurance placements so the volume of premium measured is less than normal.

Still, the findings tie in with the latest quarterly Commercial P/C Market Index Survey from the Council of Insurance Agents & Brokers released in July. It found prices for commercial p/c insurance continued to slide in the second quarter of 2014. On average, prices for small, medium and large accounts eased by a modest -0.5 percent during the second quarter, compared with 1.5 percent in the first quarter.

 

Commercial insurance rates in the United States slipped to plus 2 percent in June 2014 from plus 3 percent in May, according to latest analysis from online insurance exchange MarketScout.

Richard Kerr, CEO of MarketScout, said:

The commercial market continues to adjust downward as a result of improved underwriting results and an abundance of capacity. In the aggregate, rates are still up slightly but the trend for rate moderation continues.”

By coverage class, umbrella, workers’ compensation, D&O, and EPLI all moderated from the prior month with each registering a plus 1 percent rate increase.

Workers’ compensation rates slipped the most from plus 3 percent in May to plus 1 percent in June.

By account size, small (up to $25,000) and medium accounts ($25,001 up to $250,000) remained at plus 3 percent. Large accounts ($250,001 to $1 million) slipped from plus 2 percent to plus 1 percent and jumbo accounts (over $1 million) were up 0 percent or flat.

Kerr noted that this is the first plus 0 percent measurement since the market turned towards rate increases in November 2011:

It’s not surprising the jumbo accounts have gone flat as the name brand account continues to allure underwriters despite the lower ROE. There is a pricing benefit to being a name brand, Fortune 1000 insurance buyer.”

By industry class, manufacturing, transportation and energy all adjusted their month-over-month rate increases downward by 1 percent.

Check out latest information from the I.I.I. on financial results and market conditions.

The more than two-year upward trajectory in rates for commercial insurance in the U.S. is in jeopardy as U.S. insurers, supported by reinsurers, catastrophe bonds and insurance linked securities are finding ample reasons to start fighting over business, according to online insurance exchange MarketScout.

Richard Kerr, CEO of MarketScout noted that the composite rate for U.S. commercial insurance remained in positive territory increasing an average of 2 percent in April 2014, but warned that rate reductions are likely by year end if the current trend continues.

If you are in the market on a daily basis, you can almost feel a change in the wind. No reasonable insurer wants rate reductions. However, everyone seems to feel they are coming.”

By line of coverage, Kerr noted that catastrophic property rates will probably hold steady in the next four months with hurricane season about to start:

If the wind doesn’t blow, get ready for a solid round of rate reductions at year-end.”

On workers’ compensation, Kerr noted that it is and always has been a tough class of business with an extremely long tail:

In the last six months, several major workers’ compensation insurers have exited the market. Many others have dramatically cut back their writings. We expect workers’ compensation insurers to hold steady with small rate increases continuing.”

In its April market analysis MarketScout noted that rates for property, business interruption, BOP, umbrella, auto, workers’ compensation, and D&O all moderated one percent.

By account size, medium accounts ($25,001 to $250,000 premium) were down from plus 3 percent to plus 2 percent. Large accounts ($1 million plus premium) adjusted from plus 3 percent to plus 1 percent.

By industry class, rates for manufacturing, contracting, and public entities all moderated one percent.

Business Insurance reports on this story here.

Online insurance exchange MarketScout reported that rates for commercial insurance in the United States were up slightly in March 2014, extending the slow but steady rate increases business owners have been paying since November 2011.

The composite rate for property and casualty coverages in the U.S. was up 3 percent in March, compared to plus 2 percent in February.

Richard Kerr, CEO of MarketScout said the ongoing rate adjustments come as insurers look to meet profit targets:

Insurers target a specific ROE. Despite improving margins, insurers are still not meeting their profit targets, thus the continued marginal increases.”

BOP, commercial auto, and workers compensation led the way with rates up 4 percent. However, as PC360 reports, both commercial auto and BOP were flat compared to February increases, while workers compensation was up 1 percent over the prior month.

By account size, any account with premium from $25,000 to $1 million paid a 3 percent increase compared to 2 percent the prior month.

By industry classification, manufacturing and energy accounts paid more than the prior month with manufacturing up to plus 4 percent and energy up plus 2 percent.

Check out I.I.I. information on financial results and market conditions.

Online insurance exchange MarketScout reported that the composite rate for U.S. commercial insurance increased an average of 3 percent in January 2014.

Commercial auto and workers compensation rates led the way with increases of 4 percent.

However, rates for five coverage classes – inland marine, EPLI, fiduciary, crime and surety – increased by just 1 percent.

Richard Kerr, CEO of MarketScout noted that the average rate increase in January 2014 barely matched year-end 2013 at plus 3 percent:

If we were to post rate changes by fractional increments, you would see the actual increase at 2.55 percent, so the moderation trend continues.”

Additional capacity, insurance linked securities and a more stable economic environment (despite recent stock market adjustments) are partly responsible for the moderating rate environment, according to MarketScout.

Hat tip to Business Insurance which reports here.

Check out latest information from the I.I.I. on financial and market conditions.

Online insurance exchange MarketScout reported that the composite rate for U.S. commercial insurance slipped to plus 3 percent in December 2013, down from plus 4 percent in November 2013.

Year-end 2013 closed with ample capacity, and additional capacity from new investors in the insurance market may put further downward pressure on rates in 2014, MarketScout noted.

Commercial auto was the most expensive coverage, leading the way with rates up 4 percent.

By industry, transportation and contracting risks were assessed the largest rate increases at plus 5 percent, while public entities were assessed the lowest rate increases at plus 2 percent, according to MarketScout.

By account size, small accounts (up to $25,000 premium) had the highest rate increases at plus 5 percent, while the largest accounts ($1 million plus premium) only had rate increases of plus 1 percent.

Richard Kerr, CEO of MarketScout, offered the following perspective:

If you are in favor of significant rate increases in 2014 you may be disappointed sans a catastrophic event or some sort of new tort liability issue. Investors are clamoring for decent returns in instruments not directly connected to the stock market. When this occurs, smart people come up with creative solutions to put these investor funds to work. Insurance Linked Securities (ILS) and new age reinsurance structures have opened the insurance market to many new investors and as a result, additional capacity. This added capacity may well put additional pressure on rates in 2014.”

Check out latest information from the I.I.I. on financial results and market conditions.

Online insurance exchange MarketScout reports that the composite rate for U.S. commercial insurance held steady at plus 4 percent in November, matching the rates for October 2013.

Richard Kerr, CEO of MarketScout noted:

The market is still on an upward trajectory but rate increases are slowing.”

Kerr went on to explain that the only rate increases by coverage classification were small commercial policies (BOP) and general liability coverages, which both increased from plus 3 percent to plus 4 percent.

However, the general liability increase was possibly an adjustment from the unusually large percentage rate reduction in October, Kerr said.

Jumbo accounts (those over $1 million premium) were up from plus 2 percent to plus 3 percent. The manufacturing segment saw its rates increase from plus 4 percent to plus 5 percent.

Rates moderated by 1 percent in November for umbrella liability, auto, and crime coverages, MarketScout added.

By account size, medium accounts ($25,001 to $250,000 premium) were down from plus 5 percent to plus 4 percent.

Transportation accounts paid an average plus 4 percent in November as compared to plus 5 percent in October.

Check out latest information on financial results and market conditions from the I.I.I.

September brought a slight rate increase for U.S. companies buying property/casualty insurance, according to online insurance exchange MarketScout.

MarketScout reported that the composite rate for commercial lines rose 5 percent in September 2013, up from plus 4 percent in August.

Commercial property and general liability coverages led the way with rate increases of 6 percent, followed by commercial auto and business owners policies (BOP) with increases of 5 percent.

Meanwhile Richard Kerr, CEO of MarketScout noted that several medium sized publicly traded insurance companies are encountering challenges in their ongoing business operations:

These companies may be sold, restructured, or placed into run off unless they structure some creative solutions to get them past their current financial crisis. Very capable, smart insurance executives lead each of these firms. It just goes to show how quickly things can go wrong if an insurer experiences adverse loss development. Rates will increase if a few more companies experience similar deterioration.”

By account size, the larger accounts paid less premium than smaller accounts in September, according to MarketScout.

Small accounts (up to $25,000 premium) incurred average rate increases of 6 percent, medium accounts ($25,001 to $250,000) increases of 5 percent, while large accounts ($250,001 to $1 million) and jumbo accounts (over $1 million) saw increases of 3 percent and 2 percent respectively.

PC360 has more on this story.

Check out latest I.I.I. information on financial and market conditions.

Online insurance exchange MarketScout just reported that the commercial insurance rate index for the United States rose 4 percent in February 2013.

Commercial property insurance led the pack with a rate increase of 6 percent, followed by commercial auto and umbrella/excess with increases of 5 percent.

General liability rates were considerably more competitive with rates up 4 percent, compared to up to 6 percent the previous month.

Richard Kerr, CEO of MarketScout noted:

Over the last year, transportation and energy have led rate increases most of the time. However, for February, transportation was up 4 percent and energy was up 3 percent. The only industry with a lesser rate increase was public entities.

Manufacturing, service and habitational companies led the February industry rate increases at plus 6 percent.”

By account size, rates continue to be more competitive the larger the account, according to MarketScout. Small accounts (premiums up to $25,000) were up 6 percent and jumbo accounts (over $1 million) were up 2 percent.

Check out latest I.I.I. information on financial and market conditions.

Online insurance exchange MarketScout just reported that the composite rate for U.S. commercial lines increased by 4 percent in October, a moderation from the 5 percent increase in September 2012.

Richard Kerr, CEO of MarketScout put the results in perspective:

While the composite rate may have moderated in October, we believe Superstorm Sandy will cause a month on month composite rate increase in November. It will take months before we know the magnitude of insured claims, but as time passes, the projection for insured losses continues to increase.”

Property, business owners (BOP) and general liability all saw an easing in rates from plus 6 percent in September to plus 5 percent in October.

MarketScout noted that these three coverages represent a large volume of business, thus the drop in the overall composite rate from plus 5 percent to plus 4 percent.

By account size, small sized accounts (premiums up to $25,000) increased 5 percent, while medium and large accounts ($25,001 to $1 million) were up 4 percent and jumbo accounts (over $1 million) were up 3 percent.

By industry classification, service, habitational and contracting risks were up the most with an increase of 5 percent.

Business Insurance and PC360 have more on this story.

Further information from the I.I.I. on industry results and market conditions is available here.