Composite P&C rate up 1% while personal rates up 2% in February 2015

According to the MarketScout insurance exchange, the U.S. composite rate for all property and casualty lines across all states was up 1% in February after a flat January 2015. Personal insurance rates held stable at plus 2%.

Pricing measurements by coverage classification reflected no further price deterioration in any line and an increase of 1% in auto, professional liability, and EPI from plus 1% to plus 2%.

By account size, large accounts ($250,001 to $1,000,000 premium) increased from flat to plus 1% while all other account sizes remained the same as in January 2015.

When measuring by industry classification, contacting, habitational, public entity, and transportation all increased by 1% in February 2015 as compared to January 2015.

Is this an aberration?

Insurers are not going to cut deep and long in this cycle

“February is normally a low volume premium month so we would caution about putting too much credibility in these metrics; however, historically once the insurance market starts softening it normally accelerates rather than moderates or turns around,” said MarketScout CEO Richard Kerr in a statement announcing the findings.

“We speculate insurers are not going to cut deep and long in this cycle. Big data, modeling software and improved underwriting acumen are resulting in insurers simply being too smart to fall for extended and deep price cuts.”

Here are the composite raw numbers from MarketScout:

By Coverage Class
Commercial Property Up 1%
Business Interruption Up 0%
BOP Up 1%
Inland Marine Up 0%
General Liability Up 1%
Umbrella/Excess Up 1%
Commercial Auto Up 2%
Workers’ Compensation Up 0%
Professional Liability Up 2%
D&O Liability Up 1%
EPLI Up 2%
Fiduciary Up 0%
Crime Up 0%
Surety Up 0%

 

By Account Size
Small Accounts Up 2%
Up to $25,000
Medium Accounts Up 1%
$25,001 – $250,000
Large Accounts Up 1%
$250,001 – $1 million
Jumbo Accounts Up 0%
Over $1 million

 

By Industry Class
Manufacturing Up 0%
Contracting Up 2%
Service Up 1%
Habitational Up 1%
Public Entity Up 1%
Transportation Up 2%
Energy Up 0%

Learn more about the continued price stability in the U.S. personal lines market on the next page.

Personal rates

In February 2015, U.S. rates for homeowners insurance for homes under $1,000,000 value were down slightly from plus 3% to plus 2%, matching the rate increase for homeowners insurance covering homes valued over $1,000,000. Automobile rates remained at plus 2%. Personal articles rates were up 1%.

“We expect continued price stability in the U.S. personal lines market,” according to Kerr. “The only area where personal lines rates are changing notably is in catastrophe exposed non-admitted homeowners’ placements. In 2014, more insurers entered this space so the additional competition created some downward rate pressure. However, it appears the new entrants have utilized most of their dedicated cat capacity very early. Rates are trending higher for non-admitted cat capacity. The patient will be rewarded.”

Here’s a summary of the Feburary 2015 personal lines rates.

Personal Lines
Homeowners under $1,000,000 value Up 2%
Homeowners over $1,000,000 value Up 2%
Automobile Up 2%
Personal Articles Up 1%

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