It Begins: 2017 Closes with P-C Rate Increases Across the Board

In catastrophe-exposed areas, some homes are experiencing rate increases as high as +15% heading into the New Year, MarketScout reports.

According to the latest quarterly MarketScout pricing survey, composite rates for commercial and personal lines were up +2% and +3% in the fourth quarter of 2017, respectively—compared to +1% and +2% in the third quarter.

Not surprisingly, in both personal and commercial lines, insureds in cat-exposed areas incurred higher rate increases. “We are seeing different rates in different geographical areas,” says Richard Kerr, MarketScout CEO. “Insureds with homes in cat-prone areas—particularly those who suffered losses in the 2017 wind season—were hit with the highest rate increases.”

The composite rate for homes of all values was +4% in fourth-quarter 2017, while average auto pricing increased from +2% in the third quarter to +3% in the fourth. Personal articles rates held steady at +1%.

Meanwhile, every commercial coverage class assessed rate hikes except directors & officers, professional liability and commercial auto. Average property pricing increased the most between the third and fourth quarters, from +1% to +3%. Auto and transportation accounts incurred the largest year-over-year rate increases at +5%.

Although “most insurers are assessing rate increases at a moderate pace,” Kerr says, “underwriters are rarely surprised by aggregate losses because they have so many pricing and modeling tools.”

Jacquelyn Connelly is IA senior editor.