Property/casualty insurance rates slide further in JanuaryReprints
Commercial property/casualty insurance rates are continuing to fall, according to a pair of surveys released Friday.
Commercial insurance rates fell an average 4% in January from those of the same month a year earlier, Dallas-based electronic insurance exchange MarketScout reported. Commercial property led the descent with rates dropping an average of 5%, while professional liability rates followed closely at 4%. No line tracked by MarketScout posted an increase, although rates for commercial automobile, employment practices liability and crime were flat.
In a break with the usual pattern found by MarketScout, the largest accounts — which tend to enjoy the largest decreases — posted the lowest average rate decrease at 3%. Medium sized accounts enjoyed the largest at 5%.
Among classes of business, habitational accounts received the biggest rate break with rates down an average of 5%. Transportation followed with rates down 4%.
“Commercial property rates dropped from minus 2% in December 2015 to minus 5% in January 2016,” said MarketScout CEO Richard Kerr in a statement accompanying the report.
“Commercial property insurers are getting ready to scratch each other's eyes out as they fight for market share,” Mr. Kerr said in the statement. “We see nothing to prevent commercial property rates from dropping further.”
Meanwhile, another survey released Friday by the Washington-based Council of Insurance Agents & Brokers showed a similar trend in the fourth quarter of last year. The council found that rates dropped an average of 2.8% in the fourth quarter compared with rates for third quarter renewals.
“Consistency was the theme of 2015 as we saw decreased rates across all size accounts in all four quarters,” said council President and CEO Ken A. Crerar in a statement.
“This soft market presents both challenges and opportunities for brokers,” he said. “Lower rates meant less revenue, but as the economy improved, policyholders were seeking increased limits and additional lines of coverage. This gave our members a chance to be creative and provide added value to their clients beyond just negotiating lower rates.”