April Marks ‘Reversal’ for P-C Pricing

Commercial insurance rates crept upward to -2% in April from -3% in March and -4% in February, according to the latest MarketScout pricing survey.

Meanwhile, personal lines pricing hardened slightly for the first time in months, reaching +1% in April after climbing to flat in March from -1% in February.

“It seems we may have a reversal of sentiment,” says Richard Kerr, MarketScout CEO. “Rates are moderating.”

Commercial rates changed in most coverage classes: Average pricing for property, business interruption, inland marine, workers comp, general liability and fiduciary increased a percentage point, while rates for umbrellas, auto, D&O, EPLI, crime, professional liability and surety held steady. BOPs was the only coverage class to report an average rate reduction, slipping from -1% in March to -2% in April.

Just seven months into a soft commercial market that has so far yielded a maximum composite rate decrease of -4%, “this soft market may be limited in length and severity,” Kerr points out. “A limited soft market would be a bit surprising [given] the current ample market capacity. However, more sophisticated underwriting tools seem to be limiting market swings.”

In personal lines, rates for homes valued less than $1 million inched up slightly to 1% in April from flat in March. Auto and personal articles rates followed suit. Pricing for all other homes remained flat.

“The trend for price decreases in the personal lines market reversed in April,” Kerr says. “Perhaps the increasing flood and hailstorm losses had an impact, or perhaps it is just an aberration. We will know more over the next few months.”

Jacquelyn Connelly is IA senior editor.