Aggressive pricing for large, name-brand accounts has waned as U.S. commercial rates jumped 5 percent in March compared to the same month a year ago, says MarketScout.
“Other than the cachet or bragging rights, there are few sound underwriting reasons for aggressively pricing large accounts,” says Richard Kerr, CEO of the Dallas-based electronic insurance exchange.
“Risk is risk, and exposure is exposure,” he adds. “In March, underwriters more frequently assessed an appropriate premium for large accounts.”
Typically, competition to get some of these prestigious, name-recognized—and high-premium-generating—accounts on the books resulted in an advantage for the buyer. That may no longer be the case.
Comparing March 2013 to the same month a year ago, MarketScout's monthly Market Barometer indicates all sizes of commercial accounts were up 5 percent in March, except medium-size accounts of between $25,001 and $250,000 in premium, which were up 6 percent.
But the most movement in rate from a month ago was seen in large ($250,001 to $1 million premium) and jumbo (over $1 million premiums) accounts.
In February rates for these accounts were up 3 percent and 2 percent, respectively. Kerr says there is a “considerable amount of chatter amongst underwriters regarding pricing in the area.”
By coverage class, rates for commercial-property, workers' compensation, commercial auto, umbrella/excess and business-owners policies were up 5 percent for the month.
Manufacturing continues its recent trend of leading all industry classes. Rates here were up 7 percent in March, followed by increases of 5 percent for contracting, service, and habitational.
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