The latest monthly MarketScout report shows that commercialproperty and casualty insurance rates increased at a slower rate,rising 4 percent in October, but Sandy could have a dramatic impacton rates in the future, the CEO of the Dallas-basedelectronic-insurance exchange says.

MarketScout cites three lines of business—property, businessowners and general liability—as the major cause of the moremoderate increase, as rates in these lines increased by 5 percentinstead of 6 percent last month.

Making note of Hurricane Sandy, Richard Kerr, CEO ofMarketScout, says, “While the composite rate may have moderated inOctober, we believe Superstorm Sandy will cause a month on monthcomposite rate increase in November. It will take months before weknow the magnitude of insured claims, but as time passes, theprojection for insured losses continues to increase.”

The report says all lines of business remained on the increaseduring the month of October.

Medium-sized accounts were up 4 percent in October, down fromup-6 percent a month ago. Small accounts were up 5 percent,compared to up 6 percent in September.

Large accounts were up 4 percent and jumbo accounts were up by 3percent, both unchanged from September.

Meyer Shields, an analyst with Stifel Nicolaus, notes that theincreases, while down from September, are in line with the 4percent increases seen in May, June and July.

Of all lines of business, workers' compensation increased themost at 6 percent in October, unchanged from September.

“We see insurers' deteriorating calendar-year results as theprimary catalyst for rate increases, and we expect these increasesto accelerate as favorable reserve development subsides andaccident-year results edge worse,” says Shields.

Turning to personal lines, MarketScout says rates remainedunchanged on a month-to-month basis at up by 3 percent.

All four lines of business remained unchanged from the previousmonth. Homeowners insurance, under $1 million in value, was up 3percent, while homeowners, over $1 million, remained up 2 percent.Automobile and personal articles were up 3 percent.

Kerr notes that while rates were stable for the month, therewill be rate impacts from Superstorm Sandy. He says that while theNational Flood Insurance Program will pick-up flood claims,insurers providing excess flood coverage will see losses.

“And of course there will be wind and fire claims,” says Kerr.“The property and loss-of-use claims are already rolling in. Couplethis with the auto claims, and Sandy may have a notable impact onrates for personal insurance, particularly in theNortheast.”