P&C rates continue to hover where they have for the past four months, remaining relatively unchanged in June, according to distribution and underwriting company MarketScout.
“We are in the insurance doldrums,” Richard Kerr, MarketScout's CEO, said in a statement. “The absence of rate movement could be yet another signal that insurers simply are not going to participate in a price-slashing war as was done in previous market cycles.”
Rates in just one type of coverage class–Business Interruption–were down for June, at -1%. Commercial Auto posted the largest gains, at 2%. Commercial Property, Business Owners' Policy, Workers' Compensation, D&O and EPLI were all up 1% in June.
When broken out by industry, Habitational–the line that provides coverage for owners of condos, apartment buildings and other multi-unit dwellings–saw the largest increase, at 2%. Public Entity and Transportation rates were up 1% each, while Manufacturing, Contracting, Service and Energy remained flat.
When analyzed by account size, it pays to be small: Rates for such accounts (up to $25,000 in size) posted a 2% increase. Rates trickled down as accounts became larger: Medium accounts are up 1%, but large accounts are down 1% and jumbo accounts are down 2% in June.
For this report, MarketScout analyzed pricing surveys conducted through The National Alliance for Insurance Education and Research. Below, a summary of June 2015 rates by coverage, industry class and account size, taken from MarketScout research:
| By Coverage Class | |
| Commercial Property | Up 1% |
| Business Interruption | Down 1% |
| BOP | Up 1% |
| Inland Marine | Flat |
| General Liability | Flat |
| Umbrella/Excess | Flat |
| Commercial Auto | Up 2% |
| Workers' Compensation | Up 1% |
| Professional Liability | Flat |
| D&O Liability | Up 1% |
| EPLI | Up 1% |
| Fiduciary | Flat |
| Crime | Flat |
| Surety | Flat |
| By Industry Class | |
| Manufacturing | Flat |
| Contracting | Flat |
| Service | Flat |
| Habitational | Up 2% |
| Public Entity | Up 1% |
| Transportation | Up 1% |
| Energy | Flat |
| By Account Size | |
| Small Accounts | Up 2% |
| Up to $25,000 | |
|
| |
| Medium Accounts | Up 1% |
| $25,001 – $250,000 | |
|
| |
| Large Accounts | Down 1% |
| $250,001 – $1 million | |
|
| |
| Jumbo Accounts | Down 2% |
| Over $1 million | |
Steady pricing also is evident in personal lines, where the composite rate is up 1% in June, MarketScout reports. This is the third straight month of 1% rate increases, a slight decrease when compared to the year's first quarter rate increases of 2%.
Kerr credits the steady rates to underwriting tools, catastrophe modeling and competition. “Robust competition balances any attempts at price increases,” he says. “It seems we now have a very solid foundation in the U.S. personal lines insurance marketplace.”
When broken down by account, in June Automobile rates remained unchanged from the month previous, at 2%. However, Personal Articles rose a percentage point to 1%. Homeowners' policies remained stable. Whereas policies under $1 million in value adjusted rates slightly from flat to 1%, policies over $1 million in value decreased a percentage point, coming in flat for June.
| Personal Lines | |
| Homeowners under $1,000,000 value | Up 1% |
| Homeowners over $1,000,000 value | Flat |
| Automobile | Up 2% |
| Personal Articles | Up 1% |
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