Commercial P&C rate growth eases again Q1; property defiant: MarketScout
Commercial P&C insurance rate increases slowed fractionally to average 5% annual pace in the first quarter of 2023 but with property coverage still holding its own against policy disinflation and with sudden upward moves for large accounts and the transportation sector, a quarterly pricing survey from MarketScout has indicated.
The 5% reading is a fractional reduction against the 5.1% annual rate in the prior quarter and a consecutive step in a running but gradual deceleration that saw the market still growing 6% y/y one year ago. Gains came "in a deliberate, modest fashion."
“It’s not surprising to see rates holding steady in the first quarter,” the CEO of Novatae Risk Group Richard Kerr said in a comment for MarketScout. “We will get a better measure of overall composite rates for 2023 in the next two quarters.”
Average rates in commercial property grew at a 9.3% annual pace, flat from the fourth quarter and up from every prior reading over the past year. Property is the only coverage class with accelerated rate growth versus the year prior period.
Beyond property, rate growth remains above the overall P&C average pace for cyber at 15.7% and commercial auto at 7.3% y/y.
Coverage classes with notable changes in pace included general liability, down from 6.7% in Q4 2022 to 4.3% in Q1 2023 and employment practices, down from 6.3% growth to a 3.7% annual pace. Cyber cover slowed from a 20% annual pace in Q4 to Q1's 15.7% pace. The only palpable upward adjustment came for business interruption, recouping about 1/3 of the pace lost over the prior two quarters.
The transportation segment suffered the only acceleration in rate increases amongst the tracked client industries. The segment, which suffered the highest rate of rate increase through all of 2022, is now back to seeing rates up 8% year on year after a dip in Q4.
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