Personal-lines rates may be on their way down in 2014 due to a quiet hurricane season and expected strong earnings in 2013, according to MarketScout CEO Richard Kerr.
“If insurers' profits are tallied as anticipated, we expect lower rates in 2014,” Kerr says in a statement accompanying MarketScout's latest monthly Market Barometer report.
Personal-lines rates in November were up by 3% compared to the same month a year ago, unchanged from October's rate movement. Both months saw some moderation compared to September, during which rates were up by 4% compared to September 2012. Kerr said last month that homeowners and auto coverages on traditional accounts were seeing premium reductions due to little catastrophe activity.
At that time, rates for dwellings under $1 million increased by 3%. In November, according to MarketScout, rates for such dwellings were up by 2%. Rates for higher-value homes valued over $1 million, though, were up by 5 percent in November.
Auto was up by 3% in November and personal articles were up by 2%.
Commercial lines
Commercial-lines rates, meanwhile, rose by 4% in November compared to the same month a year ago, unchanged from October and, according to Kerr, a sign that rate increases in general are moderating compared to past months. “The market is still on an upward trajectory,” says Kerr, “but rate increases are slowing.”
Only two coverages—business owners policies (BOP) (up by 4%) and general liability (up by 4%)—showed higher increases than October. MarketScout notes that the general-liability increase was “possibly an adjustment from the unusually large percentage rate reduction in October.”
The greatest rate increase was seen in commercial auto (up by 5%). Crime and surety showed the lowest increases, each up by 1%.
By account size, rates for small (up to $25,000 in premium), medium ($25,001 to $250,000) and large ($250,001 to $1 million) accounts were all up by 4%, while jumbo accounts (over $1 million) were up by 3%.
By industry class, manufacturing, contracting and service were up by 5%; habitational, transportation and energy were up by 4%; and public entity was up by 3%.
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