P-C Rates Continue to Hover Near Flat

Between June and July, commercial and personal lines insurance rates held steady at -1% and +1%, respectively, according to the latest MarketScout pricing survey.

By commercial coverage class, workers compensation and property experienced the most aggressive pricing in July at -2%. Average rates for business interruption, BOPs, fiduciary and D&O all increased slightly from -1% to flat. Professional liability pricing was the only coverage class to mark a decrease, slipping from +2% to +1%.

Rates for all other commercial coverages held steady, as did average pricing based on account size across the board.

“While insurers continue to grant minor rating concessions, many are pushing for an end to any further rate reductions,” explains Richard Kerr, MarketScout CEO. “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.”

According to Kerr, commercial insureds will need to convince underwriters they can control losses if they don’t want to end up paying a much higher premium—and suffer a blow to profit margins in the process.

In transportation in particular, “for the first time in a while, we are hearing from insureds who are complaining about lack of cooperation from insurers as they try to manage their risk portfolio,” Kerr says. “These insureds would be well advised to allocate capital toward implementing loss control and company-wide safety programs.”

On the personal lines side, all homeowners insurance rates clocked in at +2%, while average pricing for personal auto and articles held steady at +1% and flat, respectively.

“Admitted market insurers are more aggressive when pricing cream-of-the-crop accounts,” Kerr says. “However, they will certainly raise rates on an account with losses or poor mitigation efforts. Non-admitted insurers continue to be opportunistic, but are slowing down rate reductions.”

Jacquelyn Connelly is IA senior editor.