Marketscout says personal lines could see some competition in the high-net-worth space affecting rates in the future.
The Dallas-based insurance exchange's Market Barometer indicates overall commercial and personal P&C rates remained steady offering little in the way of surprises, but CEO Richard Kerr says two major insurers are considering entry in the high-net-worth space “in a meaningful way”.
“If they do, the increased competition could have an impact on rates,” says Kerr. He cautioned not to get too excited about the new entrants saying it is a tough market to handle requiring “enormous amount of capital and exceptional talent” to command it.
“Not many companies can fulfill those requirements,” says Kerr, adding it could take them a year or two before solidifying their place in the market.
MarketScout is a founding partner and developer of the Council for Insuring Private Clients, a new trade association formed to develop best practices for providing insurance solutions to the HNW demographic.
Overall personal lines rates remained up at 4 percent while commercial lines were up 5 percent for the month of June, unchanged from May.
All homeowners and auto policies remained unchanged from May to June standing at plus 4 percent. Personal articles floaters pricing decreased 1 percentage point to plus 2 percent.
Turning to commercial treaty renewals, gains continued overall for all lines of business with only slight deviation for a few markets, including a slight pull-back on commercial property.
“Even the impact of Superstorm Sandy seems to have been forgotten by most property insurers,” says Kerr.
For June, Commercial Property was up 5 percent, off from May's 6 percent increase. Other lines that dropped slightly were Business Interruption (up 2 percent in June compared to up 3 percent in May); General Liability (June up 5 percent to up 6 percent in May), and Umbrella/Excess (up 4 percent last month to May's up 5 percent).
Commercial Auto, Directors and Officers Liability and Employment Practices Liability Insurance all rose 1 percentage point over May. Commercial Auto came in at 6 percent, and both D&O Liability and EPLI stood at 5 percent.
Turning to account size, Small and Jumbo (over $1 million in premium) accounts experienced slight change in rates from May. Small accounts (up to $25,000 in premium) edged up 1 percentage point to 6 percent, while jumbo accounts moved down 1 percentage point to 2 percent increase. Medium size and large accounts were unchanged at up 5 percent and up 4 percent, respectively.
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