Commercial property/casualty (P/C) insurance rates declined for the tenth consecutive quarter in Q2 2017 although the market does appear to stabilising this year, according to The Council of Insurance Agents & Brokers’ (CIAB) latest market survey.
During the second-quarter of 2017 rates declined across all sized accounts by an average of 2.8%, which is actually steeper than the 2.5% average decline witnessed in Q1, 2017.
The CIAB notes that although premium pricing in the sector witnessed its steepest decline throughout last year, at -3.9%, the market does appear to be stabilising in 2017.
Ken A. Crerar, President and Chief Executive Officer (CEO) of the CIAB, said; “While premium pricing in commercial auto continued to go against market trends, most other lines remain soft but appeared to be flattening to some extent.
“In response to a soft and competitive market, we also saw carriers opt towards improving terms and conditions over dropping premium rates.”
As shown by the above table, commercial auto maintained its positive trend and rates increased by an average of 6.1%, up from the 2.4% reported a year earlier. However, all other business lines reported a continuation of the negative pricing trend witnessed throughout 2016.
Workers’ compensation rates declined by an average of 2.7% in Q2 2017, compared with a 1.9% reduction in Q1 2017, but less dramatic than the 4.3% average decline recorded a year earlier. Commercial property lines witnessed the steepest decline in the quarter, falling by an average of 3.6% compared with 3.1% in Q1, and 6% in the second-quarter of last year.
General liability lines fell by an average of 2.7% in Q2 2017, which is in line with the 2.6% reduction seen in Q1 2017, but an improvement on the 3.6% recorded in the second-quarter of 2016. Umbrella lines recorded an average rate reduction of 1.4% in Q2 2017, compared with 1.1% in Q1, and 2.8% in the second-quarter of last year.
Combined, all lines recorded an average rate decline of 0.9% in the second-quarter of this year, which is steeper than the 0.7% reduction seen in Q1 2017, but again, an improvement from the 2.9% average rate decline witnessed in Q2 2016.
Results from the survey reveal that attracting and maintaining talent remains a trend across the sector, for firms of all sizes. Talent management remains a top concern for companies, as does price competition and the flood of excess capacity in the space, as well as data security and the reform of health insurance.
Regarding investment trends, Crerar, said; “We are seeing firms make numerous investments into areas such as InsurTech and data analytics, as well as attracting young talent into our industry. The Council has made both of these areas lead priorities.”