Data from MarketScout shows that commercial property rates increased by 9.6% over the second quarter of 2021, as pricing continued to increase despite moderation in some lines of business.
Other lines with significant rate increases over Q2 included business interruption up 7%, umbrella/excess up 11.6%, commercial auto up 9%, and D&O liability up 11%.
The composite rate for the second quarter 2021 was 5.9% versus 7% in the first quarter, and commercial insurance buyers paying $25,000 or less in premium were found to be paying a slightly lower rate at 5% versus 6.3% in the first quarter.
As measured by line of coverage, professional lines rates adjusted significantly at an increase of just 4.3% versus 11.3% last quarter, and there were other slight adjustments in rates as measured by industry group, coverage classification and account size.
“We monitor trends. This quarter there was a slight trend towards rate moderation, but this could be an aberration,” said Richard Kerr, CEO of MarketScout. “Let’s see how the rest of the year plays out before we make any predictions about market rates moderating.”
He added: “We are now entering hurricane season and this fall we will be in wildfire season. Property rates continue to rise and could get even higher.”
Turning to personal lines, MarketScout reported that the composite rate is down slightly from Q1, with buyers being assessed a second quarter rate increase of 4.75% as compared to 5.6% previously.
However, with potential hurricane and wildfire events to come over the next six months, Kerr noted that “rates could change quickly.”
“An increasing number of homeowners are using non-admitted insurers,” he said. “When non-admitted insurers are hit with significant losses, they can adjust rates very quickly.”