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.
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:
On workersÃ¢â‚¬â„¢ 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 workersÃ¢â‚¬â„¢ compensation insurers have exited the market. Many others have dramatically cut back their writings. We expect workersÃ¢â‚¬â„¢ compensation insurers to hold steady with small rate increases continuing.Ã¢â‚¬
In its April market analysis MarketScout noted that rates for property, business interruption, BOP, umbrella, auto, workersÃ¢â‚¬â„¢ 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.
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