NU Online News Service, Feb. 6, 11:22 a.m. EST
The property and casualty industry’s positive rate momentum continued into the New Year as rates crept up another 1 percent in January, according to the online insurance exchange MarketScout.
“The 1 percent composite increase in January matched the increase for December 2011,” says Richard Kerr, chief executive officer of Dallas-based MarketScout. “Workers’ compensation and catastrophe-exposed property continued to exhibit the largest increases with upward adjustments of plus-2 percent.”
By coverage class, all lines were up or flat, similar to December.
Business interruption, which was up 1 percent in December, was up 2 percent last month. Umbrellas/excess and commercial auto were both flat in December and were up 1 percent in January.
Workers’ comp still showed upward momentum in January, but not as much as in December. Rates were up 2 percent in January for this line compared to 3 percent in the month prior.
By coverage class, there was little change. Small accounts, which were up 2 percent in December, rose 1 percent in January, while medium accounts, up 1 percent in December were up 2 percent in January.
Large accounts were unchanged up 1 percent, while jumbo accounts remained flat on a month to month basis.
The report follows the Council of Insurance Agents & Brokers’ fourth quarter survey of its insurance broker members that found average premium rates increased close to 3 percent during the last three months of 2011.
Responding to the MarketScout survey, Meyer Shields, a financial analyst with Stifel Nicolaus says in an analyst’s note, “We see insurers’ deteriorating calendar-year results as the primary catalyst for rate increases, and we expect these increases to accelerate as favorable reserve development subsides.”