The majority of respondents to a recent market survey agreed that market conditions continued to harden in the third-quarter of 2019, reports The Council of Insurance Agents & Brokers (CIAB).
The CIAB’s Q3 Commercial Property/Casualty Market Survey reveals that industry participants feel that during Q3, the market was transitioning from firm to hard.
On average, premium prices increased by 6.2% across all account sizes in the third-quarter, which is up on the 5.2% recorded in the previous quarter. Broken down by account size, and the CIAB notes that survey responses show that large accounts were the hardest hit, with a 7.6% average increase in premiums, versus 4.4% average increases for small accounts.
Ken Crerar, President and Chief Executive Officer (CEO) of the CIAB, commented: “After several quarters of market firming, we were in a truly unconventional hard market in Q3.
“Commercial Auto’s outsized impact on premium prices and other lines such as Umbrella and D&O continued to push prices up. Social inflation and sustained natural catastrophe losses, including floods and wildfires, also added to the strain on the markets. The question now is how long will it last?”
By class of business, and the CIAB notes that Umbrella saw an average premium increase of almost 10%, while Commercial Auto witnessed an average increase of 9.1%. Commercial property rates increased on average by 8.8% in the quarter, which is the first time in roughly 19 years where rate increases for particular lines of businesses approached double-digits.
The CIAB highlights a number of factors that possibly contributed to firming in these lines of business, such as natural catastrophe events, nuclear verdicts and distracted driving. However, premiums weren’t the only thing affected as respondents to the survey noted a significant reduction in underwriting capacity for Commercial Auto, Umbrella, and Commercial Property.