RATES ON THE RISE

A recent Conning & Company survey of insurance agents and brokers across the U.S. indicates that price increases have continued to accelerate and are in double-digit territory for most commercial lines. In addition, there is evidence in the distribution of responses and in new business pricing that the rate increases have broadened significantly from just six months ago. Across all commercial lines, 95 percent of the responses indicate that prices in the early part of this year are up, 4 percent indicate they are flat, and 1 percent indicate they are down. The same numbers in the fall 2000 survey were 57 percent, 30 percent, and 13 percent, respectively, suggesting that rate increases have broadened over the past six months to virtually all customers. Also, new business prices compared to renewal prices have shifted. Six months ago, it appeared that new and renewal pricing, on average, were roughly the same. Now, nearly two-thirds of the responses indicate that new business pricing is above renewal pricing. The survey indicates that the most significant commercial lines increases are in workers’ compensation, general liability and professional liability. The smallest increases are in umbrella, commercial property and commercial multi-peril. Based on Conning’s assessment of the current conditions in the marketplace, rate increases are not likely to accelerate significantly from the current level, but will likely be sustained in the double-digits through 2002 and probably into 2003.

Topics Trends Pricing Trends