Commercial Lines Rates Up 5% in November: MarketScout

December 6, 2012

The overall composite rate for insuring commercial accounts in the United States ticked up 5 percent in November 2012 compared to the same month in 2011.

According to MarketScout’s Commercial Lines Market Barometer, by coverage classification, property, excess liability, general liability and workers’ compensation rates increased the most at plus 5 percent. MarketScout is an insurance distribution and underwriting company headquartered in Dallas.

By account size, all accounts under $1 million in premium were up 5 percent as compared to November 2011.

Jumbo accounts more than $1 million in premium were down from plus 2 percent in October to plus 3 percent in November.

By industry class, manufacturing had the most significant month-on-month rate increase at plus 6 percent as compared to plus 4 percent the prior month. Transportation accounts were also up 6 percent.

“The manufacturing rate increase was surprising,” said Richard Kerr, CEO of MarketScout. “Normally, manufacturing is a very stable industry class absent quick pricing changes. Going from plus 4 percent to plus 6 percent was unusual.”

As for transportation, the trucking segment of this industry class is what is really driving the rate increases for the class at plus 6 percent, Kerr said. “The losses suffered by the trucking market have been considerable over the last several years. We expect further rate increases for trucking exposures.”

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 November 2012 rates by coverage, industry class and account size is set forth below.

By Coverage Class
Commercial Property Up 5%
Business Interruption Up 3%
BOP Up 4%
Inland Marine Up 3%
General Liability Up 5%
Umbrella/Excess Up 5%
Commercial Auto Up 5%
Workers’ Compensation Up 5%
Professional Liability Up 4%
D&O Liability Up 4%
EPLI Up 4%
Fiduciary Up 2%
Crime Up 2%
Surety Up 1%
By Industry Class
Manufacturing Up 6%
Contracting Up 5%
Service Up 5%
Habitational Up 5%
Public Entity Up 4%
Transportation Up 6%
Energy Up 5%
By Account Size
Small Accounts Up 5%
Up to $25,000
Medium Accounts Up 5%
$25,001 – $250,000
Large Accounts Up 5%
$250,001 – $1 million
Jumbo Accounts Up 2%
Over $1 million
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