MarketScout CEO sees some struggling companies in the marketplace, which could spell additional rate increases for commercial lines.
The Dallas-based insurance exchange reports the composite rate was up 5 percent in September compared to plus-4 percent in August—with commercial property and general liability up 6 percent during September.
“There are several medium-sized, publicly-traded insurance companies who are encountering challenges in their ongoing business operation,” says Kerr in a statement on market conditions. “These companies may be sold, restructured or placed into run-off unless they structure creative solutions to get them past their current financial crisis.
“Very capable, smart insurance executive lead each of these firm. It just goes to show how quickly things can go wrong if an insurer experiences adverse loss development,” he continues, adding more rate increases could be seen if additional insurers face difficulties.
No insurer was mentioned by name. An attempt to reach Kerr for additional comment was no immediately successful.
MarketScout's Market Barometer continues to show small accounts are paying slightly more than larger accounts. Accounts of up to $25,000 saw rates up 6 percent in September, but the increase trickled downward with each larger account—5 percent for medium accounts, 3 percent for large accounts and 2 percent for jumbo accounts.
By industry class, contracting saw rate increases of 6 percent last month while habitational, transportation and service paid 5 percent more.
Personal Lines
Personal lines rates were also up slightly in September compared to August's 3 percent increase. MarketScout says the 4 percent composite increase in September was due to increases in 4 percent increases in homeowners account under and over $1 million in value. Auto was also up 4 percent.
Kerr says buyers of low-limit coverage can benefit from shopping online. “There are many options because this product is aggressively pursued by direct and agency markets,” he says.
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