Workers' compensation and commercial auto risks saw the steepest rate increases in January at +4% compared to the same month in 2013—but the commercial-lines market overall continued its moderating trend, according to MarketScout.
MarketScout officially listed January's composite rate at +3%, the same as December—but CEO Richard Kerr notes, “If we were to post rate changes by fractional increments, you would see the actual increase at 2.55%, so the moderation trend continues.”
For January, Kerr says, rates for five coverage classes declined 1% as compared to one year ago. No coverage classifications saw rate increases. By account size, half the accounts measured enjoyed premium reductions of 1%.
Additional capacity, he adds, insurance-linked securities and a more stable economic environment (despite recent stock-market adjustments) are partly responsible for the moderating rate environment.
Both workers' comp and commercial auto saw 4% increases. Business-owner policy, general liability and umbrella/excess rates were up 3%. Commercial property, business interruption, professional liability and D&O rates were up 2%. Inland marine, EPLI, fiduciary, crime and surety risks all increased by 1%.
By industry, risks in manufacturing, contracting, service and transportation all saw 4% rate increases. Habitational risks were up 3%, public entity and energy risks were up 2%. Personal lines rates, meanwhile, also moderated in January, up by 2% year-over-year compared to 3% in December. “2013 was a good year for personal lines insurers,” Kerr adds. “We expect continued aggressive pricing, but that will be geographically modified as appropriate.”
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