Advisen Front Page News
- Wednesday, April 7, 2021
US commercial rate increases continue to climb in Q1
Advisen
US commercial rate increases continue to climb in Q1
By Erin Ayers, Advisen
Commercial rate increases in the United States retained momentum in the first quarter of 2021, with an average change of 7%, according to the latest data from MarketScout.
Umbrella/excess, directors and officers liability, and professional liability showed the steepest rate increases in the first three months of the year at 14%, 11.6%, and 11.3%. Even workers compensation rates increased by an average 1.7%, according to MarketScout.
The average rate increase change of 8.6% for property insurance doesn’t reflect the experience for all buyers, with some factors pushing prices much higher, according to MarketScout CEO Richard Kerr.
“Because the property market is so large, the composite rate is tempered by placements across the U.S.,” said Kerr. “In CAT-prone areas, rates were up significantly more than the composite rate of 8.6 percent.”
He added, “We expect rate increases to continue for the remainder of 2021.”
The transportation sector experienced the highest average increases across all industries, at 11.7%, followed by habitational risks at 9.3%. Energy rates “increased more aggressively” during the first quarter, according to the report.
“Jumbo” and large accounts saw higher average increases at 8.3%, while small and medium accounts were up 6.3% on average.
In the personal lines sector, MarketScout saw rate increases moderating in the first quarter, at an average 5.6% compared to 6.3% in Q4 of 2020. Homes valued at $1 million or higher experienced the highest average increases at 6.7%, compared to 5% for homes under $1 million. Personal auto rates were up an average of 5.3%, according to the data.
Even with rate increases trending downward on average, Kerr noted that homeowners in Florida and California continued to experiences price hikes as much as 30% as insurers continue to cut back on their market share in riskier regions.
MarketScout bases its analysis on pricing survey conducted by the National Alliance for Insurance Education and Research.
