Reflecting little change from the third quarter of 2018, fourth-quarter composite rates for commercial and personal lines were up +2% and +2.25%, respectively, according to the latest quarterly MarketScout pricing survey.

The commercial lines composite rate increase for all of 2018 was +2%, while the personal lines composite rate increase for the year was +2.5%.

Transportation and commercial auto led rate increases in the fourth quarter, clocking in at +6% and +7%, respectively. Most classes registered smaller increases in the 1-3% range, including commercial property (+2.5%), general liability (+2%) and professional liability (+1.5%). Workers compensation, meanwhile, measured a fourth-quarter rate decrease of -1.5%.

“Ample capacity remains in the commercial insurance market,” says Richard Kerr, MarketScout CEO. “Rates for all coverage classifications other than workers compensation are increasing at a controlled, slow pace. Only transportation and commercial auto exposures are suffering large rate increases.”

In personal lines, rate increases for homes valued under $1 million held steady at +3%, while rate increases for homes valued over $1 million held steady at +2%. Personal auto rates were down slightly and personal articles rates were up slightly, both moving by half a percentage point.

Particularly challenging for personal lines insurers is the California market, where Kerr expects to see short-term rate increases in the 10-50% range from non-admitted insurers. “It’s going to be a rough ride until things settle down a bit,” he says. “The brush and wildfire issues in California are similar to the windstorm issues suffered in Florida 12-14 years ago. As more California insurers are deemed insolvent and others begin to restrict their capacity, the market is hardening. We expect to see new entrants into the California market.”

Jacquelyn Connelly is IA senior editor.