Filed Under:Markets, Commercial Lines

MarketScout: Rates Up 5 Percent in December; Caps Off Year of Slow, Steady Increases

Commercial-insurance rates climbed by 5 percent in December 2012 compared to December 2011, according to MarketScout’s latest figures, capping off a year marked by slow and steady rate increases, rather than the dramatic spike seen in the hard market of 2001-2005.

But while 2012 didn’t see increases typically associated with a hard market, it was the first year of consistent rate increases after over seven years of soft-market pricing. 

“Beginning January 2012, the composite rate was up 1 percent but steadily increased over the course of the year,” Dallas-based MarketScout says. “By year end, the average rate increase on property and casualty business in the U.S. was up 5 percent.”

Richard Kerr, CEO MarketScout CEO says in a statement, “This market turn is not like the last hard market of 2001 to 2005, when rates spiked up as much as 30 percent in the early stages. For the 2012 market turn, rates have adjusted slowly and steadily without any dramatic spikes. This slow and steady pace could foretell rate increases at a more sensible pace and for a longer period of time.”

Small accounts, with premium up to $25,000, led the way for December rate increases, rising by 6 percent compared to December 2011. Medium accounts, with premium from $25,001 to $250,000, were up by 5 percent. Large accounts ($250,000 to $1 million) were up by 4 percent and jumbo accounts were up by 3 percent.

By coverage class, commercial auto was up the most in December, rising by 6 percent. Commercial property and general liability were up by 5 percent. Business interruption, BOP, umbrella/excess, workers’ comp, professional liability, and D&O were up by 4 percent. Inland marine and EPLI were up by 3 percent. Fiduciary and crime were both up by 2 percent, and surety was up by 1 percent. 

By industry class, manufacturing, service and transportation were all up by 6 percent. Contracting and habitational rose by 5 percent, while public entity and energy rose by 4 percent.

Top Story

The Rising: PIA President Richie Clements' personal & professional resurrection, post-Katrina

PIA's national president reflects on the moment he became a “real” insurance agent, his agency's rebirth, and the challenges still faced by his beloved city 10 years after Hurricane Katrina.

Top Story

The big freeze: 5 signs your pipes are frozen and how to thaw them

Extremely cold temperatures are affecting unprotected pipes across the country, causing thousands of dollars in damage.

More Resources

Comments

eNewsletter Sign Up

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Mobile Phone
         

Advertisement. Closing in 15 seconds.