US Property and Casualty Rates Continue Upward Trend

Fourth Quarter 2020 Composite Rate Up 7.1%

 

Despite 2020 being one of the strangest years in recent history, the insurance industry continued to function efficiently. The fourth quarter 2020 composite rate was up 7.1 percent as compared to up 6.25 percent for the third quarter 2020. The biggest rate increases by line of coverage were for umbrella liability, professional lines and directors and officers liability. The only rate decreases from the third to the fourth quarter were for inland marine and crime coverages. Rates increased for all sizes of businesses and industries except for public entities and energy companies. Richard Kerr, CEO of MarketScout noted, “Rate increases are continuing. We believe the slight moderation in energy rates in the fourth quarter 2020 is an anomaly based on the considerable reduction in exposures in the oil and gas sector. Rates for public entities were also relatively modest.” In reviewing the results for all of 2020, the composite rate increase was 5.6 percent. Mr. Kerr noted, “Composite rates for property and casualty insurance have traded in a relatively tight corridor the last ten years as compared to the ten-year period of 2001 to 2010 when rate swings were considerably more volatile. Improved underwriting tools, catastrophe modeling and more thoughtful reinsurance placements have taken most of the severe peaks and valleys out of the market. Simply stated, underwriters are smarter than they were 15 years ago. The exceptional underwriting and technology tools help make for a more stable market.”

The National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout's analysis of market conditions. These surveys help to further corroborate MarketScout's actual findings, mathematically driven by new and renewal placements across the United States.

A summary of the fourth quarter 2020 rates by coverage, industry class and account size is set forth below.

By Coverage Class
Commercial Property	Up 9%
Business Interruption	Up 5.7%
BOP	Up 5.7%
Inland Marine	Up 4.3%
General Liability	Up 6%
Umbrella/Excess	Up 12.7%
Commercial Auto	Up 8.3%
Workers’ Compensation	Up 0.7%
Professional Liability	Up 10.3%
D&O Liability	Up 11.7%
EPLI	Up 6.7%
Fiduciary	Up 3%
Crime	Up 2.7%
Surety	Up 1%

By Account Size
Small Accounts	Up 6.7%
Up to $25,000
Medium Accounts	Up 8.3%
$25,001 – $250,000
Large Accounts	Up 9.3%
$250,001 – $1 million
Jumbo Accounts	Up 8%
Over $1 million

For detailed rating analysis or market projections by industry class, coverage or account size, contact Vilma Scott at vscott@marketscout.com.

About MarketScout

Founded in 2000, MarketScout is an insurance distribution and underwriting company headquartered in Dallas, Texas. The company is a Lloyd’s Coverholder and MGA for US insurers with specialty expertise in workers’ compensation, private client solutions, energy, healthcare, fine art, equine, jewelry, professional liability, and many specialty programs. The company owns and operates the MarketScout Exchange, as well as over 40 other online and traditional underwriting and distribution venues. MarketScout is the founder of the Council for Insuring Private Clients (CIPC) and administers the Certified Personal Risk Manager (CPRM) designation in partnership with The National Alliance for Insurance Education & Research. MarketScout is the only insurance organization to receive The National Alliance’s exclusive partnership and endorsement. The company founded the Entrepreneurial Insurance Alliance (EIA) in 2007 to support insurance entrepreneurs and in 2017 founded the MarketScout InsurTech (MIT) venture fund. In January 2018, it launched an Incubator to accelerate start-up MGAs and assume operational functions for existing MGAs and insurers. MarketScout’s company culture and sense of community encourages growth, learning and collaboration. The company has been named as one of the Best Places to Work in Insurance by Business Insurance for nine consecutive years from 2012 to 2020. The company has offices in Arkansas, Florida, Illinois, Nebraska, Pennsylvania, South Carolina, Tennessee, Texas, and Washington, DC. California license #0D60423.