The Council’s Latest Survey Shows Rates Up Again in 4Q

NU Online News Service, Jan. 25, 10:34 a.m. EST

Workers’ compensation led the way for fourth-quarter rate increases at 7.5 percent—contributing to an overall industry average rise of 2.8 percent for the time period, according to The Council of Insurance Agents & Brokers.

The Council released its 4th quarter survey results of member insurance brokers yesterday, saying prices have rebounded from negative-5.4 percent for the same period last year.

“It’s clear from the data that the market continued its upward momentum in the fourth quarter,” says Ken A. Crerar, president and chief executive officer of The Council. “Capacity was still strong, but prices rose in the face of declining underwriting profitability, dwindling reserves and huge [catastrophe] losses.”

Average rates, on a quarter-to-quarter basis, stood at 0.9 percent for the third quarter of 2011 rising to 2.8 percent in the fourth quarter.

All three account sizes displayed increases in the fourth quarter, compared to the previous quarter where only small and medium size accounts increased.

Small accounts rose 3.1 percent in the fourth quarter compared to 2.1 percent for the third quarter. In the 2010 fourth quarter, rates for small accounts stood at negative-3.8 percent.

For medium-sized account, rates increased 3.5 percent after coming in at 1.1 percent for the third quarter. Fourth quarter 2010 rates stood at negative-5.6 percent.

Large accounts were up 1.8 percent. In the third quarter, rates stood at negative-0.6 percent while for the fourth quarter of 2010 rates were negative-6.7 percent.

Workers’ comp has been on a steady rise during all of 2011, starting off last year at negative-1.6 percent and moving into positive territory in the second quarter at 2.6 percent. By the third-quarter survey, rates rose 4.1 percent before finishing the year at 7.5 percent.

Rate increases on commercial-property accounts were not far behind, coming in at 5.7 percent. They too showed steady increases during the year, at 3 percent for the third quarter and 2.2 percent in the second quarter. Rates started out 2011 at negative-2 percent.

Other lines of business that ventured into positive territory include commercial auto, general liability, umbrella, business interruption, construction, directors and officers liability, employment practices and surety bonds.

Surety bonds displayed the lowest increase for the fourth quarter coming in at 0.8 percent.

In anecdotal comments released by The Council, brokers said carriers have become tougher on underwriting and that they are paying close attention to loss experience.

Brokers said that in some lines, carriers were willing to walk-away from business if they did not get the desired rate.

The demand for insurance appeared to pick-up, according to the survey results, but The Council says the economy and competition were still a concern for brokers nationally.  

Comments

Resource Center

View All »

Contractors General Liability Coverage 102

What is a prior work exclusion? Which option is right for my client? Why do...

Sign up today to get a 50% matching credit -...

Insurance marketing sometimes seems like it's a game of swings and misses, but we're here...

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Risk Management for Law Firms

This package of 3 concise risk management articles offers straightforward content and practical suggestions law...

Guide: Top 15 E&O Risks-And How To Avoid Them

Accidents happen. But when it's an errors and omissions oversight, that accident can open your...

We'll Show You How to Reach Your Sales Goals

Whether you work alone or have a team of agents working for you, we can...

Agent & Broker Insider eNewsletter

Proven success tips and essential information to help agents and brokers grow their practice – FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.