US property/casualty rates climb 5% in Q4: MarketScout
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U.S. commercial property/casualty rates rose 5% on average in the fourth quarter of 2019, up from 4% in the third quarter, reflecting insurers’ intent to continue to increase prices across most lines, online insurance exchange MarketScout Corp. said Monday.
“Auto rate increases have been up all year long; however D&O (directors & officers) and professional rate increases have spiked significantly in the fourth quarter,” Richard Kerr, CEO of MarketScout Corp. said in a statement.
Insurers are carefully analyzing their property exposures using catastrophe modeling tools, he said. “We expect many of the major property catastrophe insurers to curtail their 2020 writings in California brush and East and Gulf Coast wind areas. Naturally, this will result in higher rates to insureds,” Mr. Kerr said.
D&O liability rates increased by 8.25%, while commercial auto increased 8% in the quarter, and professional liability rates were up 6%, and umbrella/excess rates were up 5.5%, according to MarketScout.
Commercial property rates increased 5.25% in the quarter, and business interruption rates were up 5%, while all other lines showed smaller increases, except for workers compensation, where rates fell 1%, MarketScout said.
By industry class, transportation and habitational saw the highest average rate increases at 9% and 8.25% respectively, MarketScout said.
Large accounts – those with $250,001 to $1 million in premium – saw a rate hike of 5.5% in the fourth quarter, as did jumbo accounts, which have more than $1 million in premium. Small accounts – those with up to $25,000 in premium – were up 5%, while medium accounts – those with $25,001 to $250,000 in premium – were up 4.5%.
The “steady trend” of upward rates reflects insurers’ plans to continue increasing prices across all lines except for workers compensation, MarketScout said.
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