Personal, professional lines see lower rate increases in Q2
Direct premiums written in the P&C industry are anticipated to see their highest growth in 18 years.
Professional lines saw a composite rate of 5% during 2021’s second quarter, down from 6.3% the previous quarter, according to MarketScout, which also reported composite rates for personal lines saw a slight quarter-on-quarter decrease.
The rate change for professional lines was significant, standing at 4.3% during the second quarter compared with a rate of slightly more than 11% during Q1. While some lines, such as commercial property, auto and general liability, saw rate gains from Q1 to Q2, they were not large enough to move the composite rate index.
“We monitor trends. This quarter there was a slight trend towards rate moderation, but this could be an aberration,” Richard Kerr, CEO of MarketScout, said in a release. “Let’s see how the rest of the year plays out before we make any predictions about market rates moderating.”
On the personal insurance side, rates for all lines were less expensive in the second quarter than the previous period, according to MarketScout.
“Personal lines buyers are being assessed a second-quarter rate increase of 4.75% as compared to 5.6% in the first quarter of 2021,” Kerr said. “However, we are just entering the hurricane and wildfire seasons over the next five or six months, so rates could change quickly.”
He added a growing number of homeowners are turning to non-admitted insurers, which can adjust rates rapidly when hit with significant losses.
This news comes on the heels of research that projects the property & casualty insurance industry’s 2021 direct premiums written will reach its highest growth (5.8%) in 18 years as hard market conditions for certain key lines “more than offset a linger drag from the pandemic,” according to S&P Global Ratings.
The P&C industry is expected to see a combined ratio of 99.7%, a full percentage point higher than the ratio seen in 2020.
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