March 2013 Commercial Rates Up 5%

April 05, 2013

Large Accounts Hit With Rate Increases

Based upon the composite results of commercial business placed across the United States in March 2013, placing accounts that command large premiums no longer assures the buyer of a more aggressive pricing strategy.

Richard Kerr, CEO of MarketScout confirmed the results noting, “Historically, underwriters have been very aggressive in pricing name brand or large accounts. Other than the cache or bragging rights, there are few sound underwriting reasons for aggressively pricing large accounts. Risk is risk and exposure is exposure. In March, underwriters more frequently assessed an appropriate premium for large accounts.”

Mr. Kerr went on to note, “Our most recent data showed a significant reversal in pricing strategy for both large ($250,001 to $1,000,000 premium) and jumbo (over $1,000,000 premium) accounts. In February, rate increases for large accounts measured plus 3 percent and for jumbo account plus 2 percent. These increases adjusted to plus 5 percent for both in March. There is also a considerable amount of chatter amongst underwriters regarding pricing in this area so we will be monitoring the situation very carefully.”

Workers’ compensation, professional and small commercial all received more aggressive month-over-month price increases.

Manufacturing continues to post the largest rate increases as compared to prior year results followed by contracting, service, habitational, and transportation.

The National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout's analysis of market conditions. These surveys help to further corroborate MarketScout's actual findings, mathematically driven by new and renewal placements across the United States.

A summary of the March 2013 rates by coverage, industry class and account size is set forth below.

By Coverage Class

Commercial Property

Up 5%

Business Interruption

Up 3%

BOP

Up 5%

Inland Marine

Up 3%

General Liability

Up 4%

Umbrella/Excess

Up 5%

Commercial Auto

Up 5%

Workers’ Compensation

Up 5%

Professional Liability

Up 3%

D&O Liability

Up 3%

EPLI

Up 2%

Fiduciary

Up 3%

Crime

Up 3%

Surety

Up 2%

 

By Account Size

Small Accounts

Up 5%

Up to $25,000

 

Medium Accounts

Up 6%

$25,001 – $250,000

 

Large Accounts

Up 5%

$250,001 – $1 million

 

Jumbo Accounts

Up 5%

Over $1 million

 

By Industry Class

 

Manufacturing

Up 7%

Contracting

Up 5%

Service

Up 5%

Habitational

Up 5%

Public Entity

Up 4%

Transportation

Up 5%

Energy

Up 4%

 

 

     

For detailed rating analysis or market projections by industry class, coverage or account size, contact Vilma Scott at [email protected].

About MarketScout

The Commercial and Personal Lines Market Barometers are compiled by MarketScout, an insurance distribution and underwriting company headquartered in Dallas. The firm owns and operates the MarketScout Exchange at marketscout.comas well as over 40 other online and traditional underwriting and distribution venues. MarketScout founded the Entrepreneurial Insurance Alliance(EIA) in 2009. In 2010, MarketScout launched MarketScout Wholesale, LLC (MSW), to complement its electronic underwriting and distribution strategy. In 2012, MarketScout founded the Council for Insuring Private Clients(CIPC). MarketScout and MSW have offices in Arizona, Arkansas, California, Connecticut, Florida, Indiana, Illinois, Louisiana, New York, Oregon, Tennessee, Texas and Washington, D.C.

 

 


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