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Commercial property/casualty insurance rates increased an average of 2% in April compared with the same time last year, MarketScout reported Monday.
By line, commercial automobile, employment practices liability and workers compensation registered the largest increases at 3% each, according to the Dallas-based electronic insurance exchange. Five lines — business interruption, crime, fiduciary, inland marine and surety — each experienced 1% increases.
Among industry classes, transportation accounts reported the highest rate of increase at 4% while public entities reported the lowest at 1%.
“The April composite commercial rate remained in positive territory at plus 2%, but we may see rate reductions by year-end if the current trend continues,” MarketScout CEO Richard Kerr said in a statement. “If you are in the market on a daily basis, you can almost feel a change in the wind. No reasonable insurer wants rate reductions. However, everyone seems to feel they are coming.”
He said that catastrophic property rates “will probably hold steady in the next four months because we are on the cusp of hurricane season. If the wind doesn't blow, get ready for a solid round of rate reductions at year-end.”
He said workers compensation is a “tough” class of business with a long tail.
“In the last six months, several major workers compensation insurers have exited the market,” Mr. Kerr said in the statement. “Many others have dramatically cut back their writings. We expect workers compensation insurers to hold steady with small rate increases continuing.”