The US composite commercial property and casualty rates increased slightly from up 4.5% in the first quarter 2020 to up 4.8% in the second quarter, according to analysis by MarketScout.
MarketScout Chief Executive Officer Richard Kerr notes how, while Almost all US insurers are assessing rate increases, surplus lines insurers are more aggressive as rate increases for the second quarter were up 9%.
“Drilling down even further, cat-exposed surplus lines property accounts averaged rate increases of 12 percent,” he said.
Directors and officers liability rates are moving aggressively upward, with D&O rates up 9.3% in the second quarter and Insureds with claims seeing rate increases as high as 50%.
Business interruption rates were up from 4% in the first quarter to plus 6% in the second quarter, possibly because of the concerns surrounding COVID-19 claims.
By industry group, analysts say transportation accounts continue to suffer the largest rate increases at plus 8.3% in the second quarter.
The 2020 second quarter composite rate for personal lines coverages placed in the US held steady at 3.5%, matching the rate increase for the first quarter of 2020.
However, underwriters continue to assess significant rate increases for high value homes in catastrophe prone areas, particularly in California and Florida.
“Every member laments on the struggles of placing wind in Southern Florida and brush in exposed areas of California during our Council for Insuring Private Clients (CIPC) board meeting calls. Many insurers are writing excess of very large deductibles, if at all,” Kerr added.
“Insureds are balking at some of the huge rate increases and as a result, there are probably more self-insured high valued homes in the US today than at any time in the past forty years.”
Underwriters are diligently assessing the exposure impact of COVID-19 in respects to insureds with multiple homes.
“In our last report, we anticipated insurers would be wary of covering secondary homes because of the lack of attention they would receive. If you can’t travel and everyone is on lock down, the assumption was secondary home would not be monitored as closely and small maintenance items may create large claims,” Kerr noted.
“However, we may have gotten it backwards, at least for the summer of 2020. The majority of homeowners have retreated to their secondary home in the mountains or on the beach to wait out COVID-19. So, the primary residence may be more exposed rather than the secondary.”
In the second quarter of 2020, homes under $1,000,000 coverage A were assessed rate increases of 3.3% while those over $1,000,000 coverage A were at plus 4%.
Notable exceptions were of course in cat-exposed areas of California and Florida where rate increases range from 7% to 20%.
Automobile rates were plus 4% and personal articles/fine art experienced rate increases of 2.7%.