MarketScout reports cooling of commercial insurance rates

Commercial insurance rates increased 3.72% during the third quarter of 2023 compared to a 5% increase during the previous quarter, according to MarketScout.

Rates for most lines of business with the exception of business owners policies moderated during Q3 2023, the insurance distribution and underwriting company reported.

“Reinsurers have been tough on insurance company partners the last 24 months,” Novatae Risk Group CEO Richard Kerr said in a statement. (Novatae Risk Group is MarketScout’s parent company.) MarketScout rate analysis is based on pricing research conducted by the National Alliance for Insurance Education and Research.

He added that MarketScout analysts anticipate the reinsurance position will also moderate.

“Enhanced terms are being passed along to insurers and their customers,” Kerr said. “Higher interest rates also help support reinsurers’ results, so that could be a part of the reason for moderating rates as well.”

There is a caveat, however. Underwriters remain wary about the ongoing impact of climate-driven disasters. “Their concern about global warming… is somewhat affirmed by our hottest summer on record in 2023,” Kerr said.

What follows is a summary of third quarter 2023 rate activity by line of business, according to MarketScout.

• Commercial Property — Up 9%
• Business Interruption — Up 5%
• BoP — Up 5%
• Inland Marine — Up 4%
• General Liability — Up 6.3%
• Umbrella/Excess — Up 5%
• Commercial Auto — Up 7%
• Workers’ Comp — Flat (0%)
• Professional Liability — Up 3.3%
• D&O Liability — Up 3%
• EPLI — Up 2%
• Fiduciary — Up 1%
• Crime — Up 1%
• Surety — Up 1%

See also:

• Insurer profits, premiums rise alongside costs
• Personal auto rates up 17% in first half, with more growth in store
• Global commercial property rates up in Q1, led by U.S.