Commercial property & general liability lead Q1 rate growth slide
Commercial P&C insurance rate growth slowed in the first quarter across a wide swathe of business lines, led by notable slowdowns for commercial property and general liability, a quarterly pricing study by MarketScout indicated.
The composite reading across commercial lines showed 3.9% growth year on year, a “notable decline” from the Q4 reading of 5.6%. Against the fourth quarter readings, only surety picked up from a prior flat reading, while declines for commercial property and general liability hit or exceeded 2%.
Momentum and sentiment may be pointing to a rebound already by end-quarter, Richard Kerr, CEO of Novatae Risk Group, commented for the report. “January and February posted very modest rate increases; however, rates were trending upward more aggressively in March,” he said.
“Property insurers are nervous about the 2024 catastrophe season,” he said. “Liability insurers are more calm but economic conditions and incurred, but not yet reported, claim estimates may impact rates later in 2024.”
Commercial property rate growth slowed for the third straight quarter, down 2.0 percentage points to a 6.3% annual rate, the slowest since a 5% reading in Q2 2020.
That put cyber back in first place for the fastest accelerating rates amongst commercial lines at 7.0% in Q1, still down a full percentage point from Q4. Cyber still appeared to have some newfound traction after having fallen 15 percentage points Q3 2022 to Q3 2023.
Commercial auto also passed commercial property for the fastest accelerating rates at a 6.7% annual rate, down 0.3% from the prior quarter reading.
General liability rates slowed most dramatically during the first quarter, with growth down 2.1 percentage points to 3.3% year on year, a 4.67 point drop from the local high just three quarters ago.
Other liability lines were chiefly down Q1: professional liability rate growth decelerated a point to 3.7%, a return to deceleration after a one-off rise in Q4; D&O was flat at 2.7% y/y. Rates in workers compensation held flat year on year for a third consecutive quarter.
Rate growth slowed for business interruption (BI), business owners (BOP), inland marine and umbrella/excess, but with all readings holding inside the mid-term ranges. Mark BI down a full percentage point to 5.0% y/y growth, BOP down 1.3 points to 3.7%, and inland marine down a point to 3.3.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
