NU Online News Service, Aug. 25, 2:22 p.m. EDT
Marsh provides further evidence that insurance pricing may be moderating in a benchmarking report that says property rates are experiencing an increase in the third quarter, while other lines decline at a slower pace.
In its “Marsh Insights: Benchmarking Trends” report released this week, the insurance broker and member of Marsh & McLennan Companies says that to date, third-quarter property rates averaged an increase of 1.1 percent, which includes both catastrophe and non-catastrophe exposed properties.
The report notes that the increase marks the end of an 18-month decline in property rates and is a reflection of the “considerable losses” the industry has experienced since the end of last year and through this year.
The median rate came in up 0.1 percent on property, compared to a 0.8 percent decline for the previous quarter.
Marsh says insurers are either pushing increases on property, or at least ending decreases on property risks.
Measuring general liability, Marsh says the average rate to date comes in with a decline of 3.8 percent, better than the more than 4 percent the industry has experienced since second quarter of 2010.
Median rate declines have slowed even more in this line, coming in at minus 1.4 percent, and have been on a steady rate of decline since the third quarter of last year when rates come in at negative 3.9 percent.
“Clients with difficult loss histories are more likely to experience greater rate changes at renewal, in addition to potential changes to their underlying program structure,” the report says.
The report also examines workers’ compensation and directors and officers liability for publicly traded companies.
In both lines of business, rates continue to decline, but not as sharply as previous months.
Both the average and median rates declined by 4 percent to date.
The report says some states have either enacted or plan to enact reforms that could lead to price increases. But for the remainder of this year, policyholders can expect rates to remain flat or see slight decreases.