US commercial P&C rates increase for the first time in three years
The average US commercial property/casualty premium rates increased for the first time in three years, according to the fourth quarter 2017 Commercial Property/Casualty Market Index Survey by the Council of Insurance Agents & Brokers.
Following massive catastrophes, including hurricanes, storms and wildfires, and cyber events in the third quarter of 2017, commercial property/casualty rates saw an increase of 0.3 percent across all-sized accounts, compared to a 1.3 percent decrease in the third quarter 2017.
Across five major lines of business, including commercial auto, workers’ compensation, commercial property, general liability and umbrella, average premiums increased for the second consecutive quarter, by 1.7 percent in the fourth quarter of 2017, compared to 1.0 percent in the third quarter 2017.
The Council surveyed broker members from across the US between October and December.
According to the report, sixty percent of surveyed brokers noted an increase in the number of commercial property claims in comparison to the third quarter of 2017.
Commercial Auto also remained a hot topic among respondents, with premium pricing continuing to increase significantly. Respondents also noted poor loss ratios and a sharp decrease in underwriting capacity.
According to the respondents, demand for cyber and flood continued to rise, but to a lesser extent than the previous quarter. Following some of the high profile cyber events in the summer and fall of 2017, cyber risk was ranked as the number one concern for businesses, which led to an increase in demand for cyber coverage. However, there was no sign that this increase in demand translated into policy purchases, it added.
“As expected, coming off a historic nat cat season, we are in a transitional market but it is more stable than anticipated," said Ken Crerar, president and CEO of The Council. "Due to abundant risk transfer capacity in the form of excess traditional and non-traditional capital, competition remains high in the market and carriers continue to be aggressive on new and existing business.”
