Commercial insurance wrapped up 2016 with average rate reductions of -1%, while personal lines pricing marked average increases of +2% compared to +1% in November, according to the latest MarketScout pricing survey.

After kicking off 2016 with a composite rate decrease of -4%, commercial lines pricing began to moderate slightly in April and continued a steady pattern of average -1% or -2% monthly rate reductions over the next several months—closing out the year with a composite rate decrease of -1% in November and December and marking 16 months of a soft commercial insurance market.

MarketScout has tracked commercial property-casualty rates since 2001. “Generally, the soft or hard market cycles last at least three years,” says Richard Kerr, MarketScout CEO. “We expect more moderate rate reductions for the coming year for all but a few lines of business. If interest rates increase, rate reductions could accelerate.”

Average commercial rate fluctuations held steady between November and December for all account sizes and most coverage classes. Only workers compensation pricing saw a decrease, from -1% to -2%, while property rate reductions moderated from -3% to -2% and composite increases for both EPLI and crime went up from +1% to +2%.

In personal lines, pricing increases adjusted upward by a percentage point for both homes valued less than $1 million and those valued more than $1 million, from +2% to +3% and from +1% to +2%, respectively. While the composite rate increase held steady at +2% for personal auto, rate changes for personal articles clocked the largest increase in personal lines, from flat in November to +2% in December.

Since MarketScout began tracking personal lines rates in 2012, insurers have been steadily increasing rates—“with the exception of the erratic rate direction over the last 14 months,” Kerr says. “Generally, personal lines insurers do not adjust pricing as aggressively as their commercial brethren.”

Jacquelyn Connelly is IA senior editor.