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American International Group said recently its U.S. commercial line rates are increasing at an accelerated pace. A number of other major insurers have offered similar observations in the latest earnings season.
“In U.S. commercials lines, we are seeing a rate increase overall of 4.1 percent on renewed businesses, with rate increases led by over 8 percent in our property line. The trend is accelerating from prior periods,” AIG’s Chief Financial Officer David Herzog said during the earnings call on Friday, Nov. 4. AIG’s Chartis CEO Peter Hancock added that in terms of pricing, “we are seeing hardening, both in property and casualty space.” On the casualty side, the workers’ comp rate year-on-year was up 6.3 percent.
Other major insurers also commented during their earnings calls that their rates are firming. Chubb CEO John Finnegan said during the Oct. 20 earnings call that his company is “pleased with the continued firming in the market.” For the third quarter, Chubb’s renewal rates were up 4 percent on average in its standard commercial business. “Overall, we see a firmer toning in the market which suggests we could see a further increase in the rates going forward,” Chubb CEO Finnegan said. Paul Krump, president of Chubb Commercial & Specialty Insurance remarked that “we were really excited about the acceleration that we’ve picked up in the last quarter.”