The Department of the Treasury and the Internal Revenue Service released new guidance that is “designed to expand the use of income annuities in 401(k) plans.”
If you are an insurance buyer, you might get a better price on your insurance if you use a large broker. That’s good news for insurance buyers but bad news for insurance companies. However, the volume of premium from large brokers offsets the lower rates so insurers are happy to take the business.
Insurance buyers using small agents normally pay a bit more but they are happy to do so because of what they perceive as a more personal experience with the agency ownership and upper management. Small agents can afford to spend time with the owner of a business paying $100,000 premium. Large agency executives simply cannot commit this time.
Richard Kerr, CEO of MarketScout points out, "It's no secret smaller agencies generally produce more profitable business. That's one of the reasons there are so many buyers of smaller agencies. The big aggregators wisely use the acquired profitable premium base to their benefit. Smart buyers are carefully examining a seller’s loss ratio. Some will even adjust the purchase valuation based upon the seller’s loss ratio with their top insurers.”
The MarketScout barometer includes both large and small agencies so the composite rate is a true reflection of the US market as a whole.
In July, the composite rate for commercial insurance in the US for both small and large agencies was plus 1.5 percent, down from plus 2 percent in June.
By coverage classification, property and general liability were down 2 percent as compared to down 3 percent the month before. Umbrella liability was actually up to plus 2 percent as compared to plus 1 percent the prior month.
By account size, small accounts were up 3 percent, medium up 2 percent, large up 1 percent and jumbo up 0 percent or flat.
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 July 2014 rates by coverage, industry class and account size is set forth below.
By Coverage Class
By Account Size
Up to $25,000
$25,001 – $250,000
$250,001 – $1 million
Over $1 million
By Industry Class