New data from MarketScout, a managing general agent, Lloyd’s coverholder and wholesale broker, shows that composite rate increases for both US commercial and personal lines insurance were up by more than 5% through the fourth quarter of the year.
The composite rate for US commercial insurance rates was up 5.1% in Q4 and 5.7% for the full year.
For property business, the composite rate was 9.3% in Q4, with certain cat-exposed commercial properties seeing increases as high as 25% to 30%.
“On January 1, 2023, property cat reinsurance renewals were completed except in instances of poor underwriting and continuous losses,” said Richard Kerr, Founder of MarketScout and now CEO of newly formed Novatae Risk Group.
“Virtually everyone was assessed more restrictive terms and conditions. The trickle down will have a notable effect on the profits of property MGAs and program managers due to lower base commissions.”
Cyber insurance rates continue to increase the most aggressively at plus 20% in the fourth quarter, although MarketScout believes there is a trend towards slight moderation.
For personal lines, meanwhile, the composite rate for all coverages increased 5.2% in the fourth quarter of 2022, a rate which held steady for most of the entire year.
In the fourth quarter 2022, homes under $1,000,000 in coverage value were up 7%, while homes over $1,000,000 were up 7.3%.
“We constantly remind our subscribers that the composite rate for homeowners includes homes in all geographic regions,” continued Kerr. “Catastrophe-prone areas, such as wildfire zones in California and wind-exposed Florida locations, are being assessed higher rate increases, sometimes as much as 30% to 40%.”
“Reforms recently enacted by the Florida legislature may help moderate rate increases for all homes in Florida, but any home which is wind exposed will still experience rate increases,” he added.
