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P/C Rates Slowly Increased Through 2012

Property and Casualty Rates Slowly Increased Through 2012

Transportation and Commercial Auto Exposures Lead Rate Increases in December

After seven plus years of a soft market, the property and casualty industry finally showed consistent rate increases in 2012. Beginning January 2012, the composite rate was up 1 percent but steadily increased over the course of the year. By year end, the average rate increase on property and casualty business in the U.S. was up 5 percent..

Richard Kerr, CEO of MarketScout profiled the 2012 year, “This market turn is not like the last hard market of 2001 to 2005 when rates spiked up as much as 30% in the early stages. For the 2012 market turn, rates have adjusted slowly and steadily without any dramatic spikes. This slow and steady pace could foretell rate increases at a more sensible pace and for a longer period of time.”

For December 2012, commercial auto lead the coverage classification in rate increases at plus 6 percent. By account size, small accounts ($0 to $25,000 premium) were hit the hardest with rate increases at 6 percent, while jumbo accounts continued to enjoy the most competitive pricing at plus 3 percent. Measuring by industry, transportation, manufacturing, and service accounts continued with the largest rate increase at plus 6 percent.

The National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout's analysis of market conditions. These surveys help to further corroborate MarketScout's actual findings, mathematically driven by new and renewal placements across the United States.

A summary of the December 2012 rates by coverage, industry class and account size is set forth below.

By Coverage Class

Commercial Property

Up 5%

Business Interruption

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Up 4%

BOP

Up 4%

Inland Marine

Up 3%

General Liability

Up 5%

Umbrella/Excess

Up 4%

Commercial Auto

Up 6%

Workers’ Compensation

Up 4%

Professional Liability

Up 4%

D&O Liability

Up 4%

EPLI

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Up 3%

Fiduciary

Up 2%

Crime

Up 2%

Surety

Up 1%

By Account Size

Small Accounts

Up 6%

Up to $25,000



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Medium Accounts

Up 5%

$25,001 – $250,000

 

Large Accounts

Up 4%

$250,001 – $1 million

 

Jumbo Accounts

Up 3%

Over $1 million

 

 

 
 

By Industry Class

 

Manufacturing

Up 6%

Contracting

Up 5%

Service

Up 6%

Habitational

Up 5%

Public Entity

Up 4%

Transportation

Up 6%

Energy

Up 4%

 

 

 
 

For more detailed rating analysis or market projections by industry class, coverage or account size, contact Vilma Scott at vscott@marketscout.com.

About MarketScout

The Commercial and Personal Lines Market Barometers are compiled by MarketScout, an insurance distribution and underwriting company headquartered in Dallas. The firm owns and operates the MarketScout Exchange at marketscout.comas well as over 40 other online and traditional underwriting and distribution venues. MarketScout founded the Entrepreneurial Insurance Alliance(EIA) in 2009. In 2010, MarketScout launched MarketScout Wholesale, LLC (MSW), to complement its electronic underwriting and distribution strategy. In 2012, MarketScout founded the Council for Insuring Private Clients. MarketScout and MSW have offices in Arizona, Arkansas, California, Connecticut, Florida, Indiana, Illinois, Louisiana, New York, Oregon, Tennessee, Texas and Washington, D.C.

 

 



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