MarketScout says the compositerate for commercial insurance placed in the U.S. in May was up 4percent compared to the same month a year ago.

In his comments on the month’s rate activity, MarketScout CEORichard Kerr predicts additional increases in pricing for jumboaccounts (more than $1 million) as insurers self-cure themselvesfrom what he calls “Show-Pony Syndrome.”

“It’s not unusual for underwriters to aggressively price jumboaccounts because of the cachet they bring,” says Kerr.“Fortune 100 ‘Show Pony’ accounts bring bragging rights,but sometimes rates do not justify the exposure.”

Pricing for jumbo accounts was up 1 percent in May. Small andmedium accounts were up 4 percent, with large accounts seeing a3-percent increase in pricing, according to MarketScout’s MarketBarometer.

“Some major insurers value Fortune 100 accounts morethan they would a spread of 100 accounts at the same premium withsignificantly lower loss ratios,” Kerr adds. “Economically, itdoesn’t make sense, but a few major commercial insurers areextremely aggressive when pricing jumbo accounts.”

Kerr adds that it is difficult to compare jumbo accounts tosmaller accounts because the jumbo accounts involve captives, highretentions and heavy reinsurance.

By coverage class, pricing in Workers’ Compensation andCommercial Property was up 5 percent. Pricing for Business Owners’policies was up 4 percent.

By industry, 4-percent increases were seen in manufacturing,contracting, habitational and transportation. Three-percentincreases were observed in service, public-entity and energyaccounts, says MarketScout’s analysis, which is aided by a pricingsurvey conducted by the National Alliance for Insurance Educationand Research.