Business Insurance | April 6, 2018
Author: Rob Lenihan
The composite rate for property/casualty insurance in the United States rose 2% in the first quarter of 2018, MarketScout said Friday, continuing the upward trend from the fourth quarter of last year.
Workers compensation posted a 2% decrease, the only coverage that did not see a year-over-year rate increase, the Dallas-based insurance exchanged said in a statement. Business interruption, inland marine and professional lines all raised rates 1% more than they did in the fourth quarter of 2017. Only employment practices liability insurance rates moderated.
Rates for medium accounts of $25,001 to $250,000 increased from up 2% in the fourth quarter to up 3% in the first quarter. Professional liability was up 2%, while directors and officers liability was up 1% in the first quarter, MarketScout said. By industry group, service contractors, public entities and energy accounts were assessed larger rate increases in the first quarter than in fourth quarter. Transportation account rate hikes moderated quarter over quarter, up 4% from up 5%.
“Automobile and transportation exposures continued to experience the greatest rate increases due to increasing expenses and adverse claim development,” MarketScout CEO Richard Kerr said in a statement. “Insurers are struggling with this segment of our industry. Part of the problem is actual underwriting results, part is expense ratios, and in our view, a larger part is the uncertainty of the long-term prospects for the auto insurance industry.” Traditional auto insurer opportunities, Mr. Kerr added, “will shrink unless they adapt their business model to get in the middle of the autonomous vehicle parade.”
On Thursday, insurance exchange Ivans reported that nearly all major commercial insurance lines saw renewal rate increases in the first quarter.