Personal Lines Composite Rate Up 3% In 1Q

Rates largely dependent on geography, claims history

Personal lines insurers are making some pricing tweaks by line of coverage but overall, the composite rate for the first quarter 2018 remains at plus 3 percent.

Richard Kerr, CEO of MarketScout, detailed the first quarter results, “Homeowners insurers are focusing on geography and claims history. If you live in Miami and have experienced claims, your rate increase could be as high as 15 percent. Conversely, if you are a long-term customer with no claims and live in Denver, you might see a rate decrease of 5 percent.”

Homeowners policies were priced at a composite of plus 3 percent over expiring prices in the first quarter 2018 as compared to plus 4 percent in the final quarter of 2017.

Automobile insurers need to raise prices to keep up with the pace of expenses and claims. Automobile rates were up from plus 3 percent in final quarter 2017 to plus 4 percent final quarter 2018.

According to Kerr, a bigger problem for auto insurers is the long-term viability of the product. “In five to ten years, the overall automobile insurance market will be significantly smaller because of autonomous vehicles and the entrance of automobile manufacturers into the insurance space. Retail agents are already being pounded by insurers going direct to their customers. The entrance of auto manufacturers into the auto insurance space will further reduce the amount of premium available to auto insurers and will exacerbate the already decreasing opportunities for retail agents. As an insurer, the long-term prospects for personal auto insurance don’t look good. As an agent, they look horrible.”

Personal articles rates increased from plus 1 percent to plus 2 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 2018 first quarter personal lines rates is set forth below.