US property and casualty (P&C) insurers continued to see rate increases in almost every industry and line of coverage during the third quarter of 2019, according to analysts at MarketScout.
The composite rate increase in Q3 was 4%, climbing from 3% in the previous quarter.
By line of coverage, auto underwriters increased prices the most with third quarter rate increases of 6.5%.
Surety, in contrast, was the only line to see rate moderation, moving from 1.5% to 1% last quarter, while workers’ compensation continued to hold steady at a reduction of -1.5%.
Measured on the size of the account, rates increased by 4.5% for those under $250,000 premium, and by 3.5% on accounts over $250,000.
By industry class, habitational and transportation businesses experienced the highest average rate increases at 6% and 7.5%, respectively.
“Thus far, we have had a relatively benign third quarter for property insurers,” said Richard Kerr, CEO of MarketScout.
“This helped slow the rapid pace of increases; however, property rates continue to trend upward. Liability and other lines also continue the upward trend,” he explained. “Workers’ compensation rates are still down, but we do see signs indicating workers’ compensation rates may move up in the fourth quarter of 2020.”
For other classes of business, MarketScout’s data showed that commercial property rates increased by 4.5%; business interruption by 4%; BOP 2.5%; inland marine 3%; general liability 3%; umbrella/excess 4.5%; professional liability 4%; D&O liability 4.5%; EPLI 2.5%; fiduciary 2.5%; and crime by 1.5%.
Turning to personal lines insurance, analysts similarly reported that the composite rate continued to increase, rising from 3.5% in Q2 to 4.5% in Q3.
In this market, average rates for homeowners coverage for large homes over $1,000,000 in coverage increased the most at 6.5%, driven by large homes in catastrophe-prone areas such as California and Florida.
Rates for auto and personal articles coverages also increased by 1 percentage point from the third to the fourth quarter.
“So far we have not been hit hard with any catastrophic losses in the second half of 2019,” Kerr continued.
“Had Hurricane Dorian continued on to mainland Florida as a category 4 or 5 storm, agents and brokers would really be scrambling,” he said. “Even without a hit from Dorian, CAT exposed homes are suffering significant increases.”