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U.S commercial rates continue stable rise over Q4: MarketScout

10th January 2019 - Author: Matt Sheehan

The U.S commercial insurance composite rate continued to rise by a modest but stable 2% over the fourth quarter of 2018, according to data from MarketScout, a U.S electronic insurance exchange and specialty MGA.

industry-growth-graphMarketScout noted that this result was in line with the composite rate increase for the entire year of 2018, which averaged at 2%.

The firm’s previous analyses found that U.S commercial rates rose by 2% in Q1 2018, 2.5% in Q2, and 2.5% in Q3.

Richard Kerr, Chief Executive Officer (CEO) of MarketScout, commented on the results: “Ample capacity remains in the commercial insurance market.”

“Rates for all coverage classifications other than workers’ compensation are increasing at a controlled, slow pace,” he continued. “Only transportation and commercial auto exposures are suffering large rate increases.”

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By coverage class, transportation and commercial auto saw the most notable increases in Q4, posting rate rises of plus 6% and 7%, respectively.

Business interruption also performed well at 3%, while commercial property rose 2.5% and BOP, general liability, umbrella/excess and EPLI all saw increases of 2%.

Additionally, professional liability and D&O liability rose by 1.5%, while inland marine, fiduciary, crime and surety classes increased by 1%.

Workers’ compensation was the only class to see rates fall, although to a lesser extent than in the previous quarter, posting decreases of 1.5% in Q4, compared to 3% in Q3.

Breaking rate movements down by account size, MarketScout found that small sized accounts (up to $25,000) increased by 2.5% in over Q4, while medium sized accounts ($25,001 – $250,000) increased by 1.5%.

Additionally, large sized accounts ($250,001 – $1 million) were up by 2.5% and jumbo sized accounts (over $1 million) saw increases of 2%.

MarketScout’s analysis of market conditions utilises pricing surveys conducted by the National Alliance for Insurance Education and Research.

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