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.Ã¢â‚¬
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