According to the most recent survey by the Council of Insurance Agents and Brokers (CIAB), the commercial property and casualty (P&C) market continued to decline in the first quarter of 2015.
Small, medium and large accounts fell 2.3%, on average, compared with 0.7% in the fourth quarter of 2014. Large accounts—defined as accounts generating greater than $100,000 in annual commissions and fees—saw their pricing drop by 3.7%. Medium-sized accounts—those with annual commissions and fees between $25,000 and $100,000—were down 2.7%, while small accounts—those with less than $25,000 in annual commissions and fees—remained “relatively flat,” the survey found.
Relatively calm catastrophe season helped push commercial property pricing down
“The trend of falling prices we saw in the fourth quarter of 2014, continued into the first quarter of this year,” said Ken A. Crerar, CIAB’s president and CEO. “Last quarter, buyers gained some advantage as pricing slid across the board and across all regions for most lines of business. A relatively calm catastrophe season, with the exception of the harsh winter in the Northeast, helped push commercial property pricing down in most of the country. Also, the passage of TRIA reauthorization seemed to settle that market,” Crerar noted.
Carriers were eager to book new business and were more open to negotiation in the first quarter of 2015. According to brokers in the Northeast and Midwest who responded to the survey, carriers were “more aggressive,” offering lower deductibles and multi-year contracts. Similar trends were noted by other regions.
Still, carriers were looking for good loss histories in setting prices. As one Midwest broker said, “Good accounts being marketed got very competitive pricing. Bad accounts got increases.”
Demand for commercial insurance remains strong
In addition, the survey found, demand for commercial insurance remained strong with even stronger interest in cyber liability than last quarter.
Read the full survey results at Commercial P/C pricing declined in First Quarter of 2015, according to CIAB survey.
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