Commercial property insurance rates rising: MarshReprints
Property insurance rates have begun to rise, according to a benchmarking trends newsletter posted Tuesday on Marsh Inc.’s website.
But rates for other lines of commercial coverage continued to decline during the third quarter, most notably for publicly traded companies’ directors and officers liability insurance, according to Marsh.
Catastrophes in the United States and elsewhere led insurers to push for increased or flat rates for property coverage, particularly for accounts with “significant catastrophe exposures and/or poor loss histories,” Marsh said.
Preliminary median renewal rates thus far in the third quarter have increased 0.1%, with an average rate increase of 1.1%, according to the New York-based insurance broker.
Competitive market to continue
For publicly traded companies’ D&O coverage, “renewal rates have dropped at a sustained pace since the fourth quarter 2009: Average reductions ranged from 4.6% and 7.9% for primary programs and 6.3% to 11% for total programs (primary and excess),” according to the analysis. Marsh said that abundant capacity and “robust” competition mean the competitive market is likely to continue.
Rates also dropped an average of 4% for workers compensation coverage thus far during the third quarter, Marsh said. “While rates remain favorable to insureds, proposed workers compensation reform in many states may alter the landscape and impact the overall marketplace,” Marsh said.
Preliminary rates for general liability premium renewals—reflecting guaranteed-cost and loss-sensitive accounts—decreased a median of 1.4% thus and an average of 3.8% thus far in the third quarter.
“Average rate decreases show a soft market environment for commercial general liability insurance, although the severity of decreases at renewal appears to be moderating,” Marsh said.
In a benchmark survey of second-quarter renewals, the New York-based Risk & Insurance Management Society Inc. said there were indications that the soft commercial property/casualty insurance market may be reaching bottom.