Rates for commercial insurance and personal lines placements across the United States increased by 5% and 4.5%, respectively, during the fourth quarter of 2019, according to analysts at MarketScout.
The steady trend of upward rate movement for US commercial insurance is thought to reflect insurers’ plans to continue increasing prices across almost all lines of coverage.
Richard Kerr, CEO of MarketScout, noted: “Auto rate increases have been up all year long; however, D&O and professional rate increases have spiked significantly in the fourth quarter.”
“Insurers are utilizing the many catastrophe modeling tools to carefully analyze their property exposures,” Kerr explained.
“We expect many of the major property catastrophe insurers to curtail their 2020 writings in California brush and East and Gulf Coast wind areas. Naturally, this will result in higher rates to insureds.”
In personal lines, meanwhile, MarketScout believes the hardening market has most severely impacted high net worth individuals because of their propensity to own properties in catastrophe-prone areas.
For some catastrophe-exposed homes, rates may have increased by as much as 35% in Q4.
MarketScout noted that membership organisations such as the Council for Insuring Private Clients (CIPC) are coming up with creative solutions to help insureds mitigate the impact of rate increases.
“We must all keep in mind, the barometer results include all types of personal lines insurance across the US,” Kerr continued.
“Massive placements for homes/autos/jewelry in the $300,000 to $800,000 value which are in non-cat prone areas impact the rate. If we were to measure homes over $5,000,000 in brush exposed areas of California, the average rate increase would be over 35 percent.”
