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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.
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% |