Commercial insurers moderated their rate reductions in March, and coastal property accounts actually saw increases, the latest insurance pricing survey shows.
According to the report from online exchange MarketScout, the latest composite rate for U.S. property and casualty coverages showed rates dropped an average of 4 percent in March, compared to 5 percent the previous four months.
“We have finally broken out of the doldrums. Rates are moving. Workers’ compensation, property, business interruption, small commercial (BOP), general liability and auto rates adjusted in March,” said Richard Kerr, CEO of Dallas-based MarketScout.
“Workers’ compensation pricing has been firming for the last six months. In March, the composite rate for all 50 states was flat. Rate increases are already underway in some states,” he said.
He said that one major insurer fully abandoned monoline workers’ compensation and another stopped writing new business in five states and is restricting its business in 10 others. He said that he anticipates workers’ compensation rates will begin increasing by August.
Rates for all U.S. property lines were down 4 percent; however, catastrophe exposed property risks are receiving rate increases of 2 to 5 percent, the MarketScout report indicates.
“After the Japan earthquake and RMS 11 [new catastrophe model], there has been considerable speculation about property rates,” Kerr said.
As in prior months, the larger the premium of each account, the more aggressive the pricing. Small accounts experienced rate decreases of 1 percent, medium accounts 3 percent and large/jumbo accounts (amounts exceeding $250,000) continued to enjoy average rate reductions of 5 percent.