Property-casualty rates declined for both personal and commercial lines in July, according to the latest MarketScout pricing survey.

Commercial rates fell from plus 2% to plus 1.5% since June, marking the third month in a row of pricing moderation. But the survey reports steeper cuts for accounts placed with large brokers.

According to MarketScout, while carriers are happy to write business for larger brokers at a lower rate because they make up the premium in volume, these accounts usually don’t end up being as profitable for insurers—after all, a smaller agent can afford to spend time with a business owner who pays a $100,000 premium, but a large agency exec probably can’t make the same commitment.

“It’s no secret smaller agencies generally produce more profitable business,” says Richard Kerr, CEO of MarketScout. “That’s one of the reasons there are so many buyers of smaller agencies—the big aggregators wisely use the acquired profitable premium base to their benefit.”

By coverage class, property and general liability declined one percentage point, from plus 3% in June to plus 2% in July. The only class to record an increase was umbrellas, from plus 1% to plus 2%. Both small and large accounts held steady at plus 3% and plus 1%, respectively. Medium accounts moderated from plus 3% to plus 2% and jumbo accounts were flat for the second month in a row.

Meanwhile, personal lines rates fell back to plus 3% in July, after increasing to 4% only briefly the prior month. Although Kerr notes that “rates for homes in coastal areas tend to pull the rest of the market upwards,” homes of all sizes moderated from plus 4% in June to plus 3% in July, as did personal auto. Personal articles rates held steady at plus 2%. 

Jacquelyn Connelly is IA senior editor.