Commercial rates fell from plus 1.5% to plus 1% in August, while personal lines pricing moderated from plus 3% to plus 2%, according to the latest MarketScout pricing survey.

As the composite rate for U.S. p-c insurance closes in on a flat market, MarketScout expects a soft market could be on the horizon.

“Insurers really don’t want to enter another era of rate declines,” says Richard Kerr, MarketScout CEO. “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.”

Although commercial property rates were slightly up at plus 3% and workers comp rates rose from plus 1% to plus 2% in August, business interruption was down 1% to flat, as were fiduciary and crime. BOPs, commercial auto and umbrellas all moderated by one percentage point. By account size and industry class, rates held steady between July and August.

Contributing to personal lines pricing moderation were all classes of homeowners policies. For those valued less than $1 million, rates moderated from plus 3% to plus 2%. Homes valued more than $1 million moderated even more significantly, from plus 3% to plus 1%. Auto and personal articles held steady at plus 3% and plus 2%, respectively.

According to Kerr, the recent moderation in personal lines is not surprising. “Personal insurance is becoming more competitive due to the limited number of major catastrophes this year, better automation systems and new market entrants,” he explains.

Jacquelyn Connelly is IA senior editor.