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Member, Beacon International Group, Ltd.
Personal lines rates rose an average of 3% in April, according to Dallas-based electronic insurance exchange MarketScout.
That's in contrast to the commercial property/casualty market, which MarketScout said in a statement “appears to be sliding back into a more aggressive pricing mode,” with Aril commercial rates rising an average of only 2% over those of the same period a year ago.
Three of the four personal lines in the MarketScout survey—homeowners under $1 million value, homeowners over that value and personal automobile—registered 3% increases while personal articles coverage rose 2%.
“Spread of risk is extremely important for personal lines insurers,” said MarketScout CEO Richard Kerr in the statement announcing the April survey.
“Those that are heavily burdened with catastrophe-exposed business are taking a big chance,” he said. “We are noting insurers are actually requiring a balanced book if agents want to access their cat capacity.
“This is good news for those agents with widespread operations because they can offer an insurer business in the central U.S. to balance their cat-exposed book,” said Mr. Kerr. “Those who are, for instance, only in Florida, will find themselves getting paid less commission and having access to less capacity. Watch carefully as boutique personal lines agencies focused largely on cat-exposed areas begin to realign their strategy as they endure commission reductions and capacity restrictions."