Commercial property rates increased by 7% during the third quarter of 2020, according to data from MarketScout, the US electronic insurance exchange and specialty MGA.
The firm found that re/insurance rates increased by 6.25% on average in Q3, with rate increases on every line of coverage and industry class.
The largest rate increases were seen in property, D&O, umbrella/excess, professional liability and commercial auto.
The composite rate was up from 4.8% in the second quarter, and MarketScout’s CEO and Founder, Richard Kerr, says continued “aggressive rate increases” can be expected throughout Q4.
D&O rates were up the most at plus 11.5% followed by umbrella and excess liability which registered an increase of 8.5%.
After this was commercial auto with an increase of 8%, then professional liability at 7.5% and commercial property at 7%.
EPLI was up by 6.5%, with business interruption and general liability both seeing increases of 5.5%, and BOP and inland marine experiencing an uptick of 5%.
Next crime rates increased by 3.5%, fiduciary by 3%, and surety by 0.5%. And for the first time in over five years, workers’ compensation rates were also up, albeit by only 0.5%.
Looking at rate increases by account size, medium accounts ($25k to $250k) and large account ($250k to $1m) saw the joint-largest increases of 7%.
But other sizes were close beind, with small accounts (up to $25k) and jumbo accounts (over $1m) both seeing increases of 5%.
For personal lines, the third quarter composite rate was up by 5%. Line by line, homeowners under $1m value saw rate increases of 5%, homeowners over $1m was also at 5%, personal articles 4.5% and automobile 5%.
“The composite rate is measured on millions of insureds across the United States in low risk areas,” explained Kerr.
“Conversely, homeowners in California and coastal areas of Florida are suffering massive rate increases. If an insured owns a home in high risk wildfire or hurricane areas and has suffered prior losses, rate increases can be as high as 40 percent,” he went on.
“Many admitted insurers are avoiding taking risk in these areas, thereby, driving insureds to the non-admitted market. Since there is less regulation for non-admitted insurers, they can restrict coverage and charge higher rates.”
