US insurance rates up 50% in hard hit catastrophe areas: MGA MarketScout
Personal lines rates for US homes are up in all locations but “Florida and California are getting hit the hardest,'' according to US MGA and wholesale broker MarketScout.
The MGA found that the composite rate for US personal lines had increased by 3.5 percent in the second quarter of 2019, compared to a lower rise of 2 percent in the first quarter, however, rates in certain catastrophe hit areas have increased by as much as 50 percent.
Richard Kerr, CEO of MarketScout, said: “Rates for homes are up in all locations, however, Florida and California are getting hit the hardest. Large admitted markets are cutting back in Florida resulting in more business going to the more expensive non-admitted markets.
“In California, most insurers are running from new business and remain fearful of another torturous wildfire season. Some homeowners are being assessed 50 percent rate increases along with much larger deductibles. Only three months ago, these rate increases were around 20 to 25 percent so the trend is up.”
He said this upward trajectory is “likely to continue for the rest of the year” especially with the fourth of July earthquake reminding underwriters quake exposure is very real.”
On friday 5th of July, a 7.1 magnitude tremor hit the Californian town of Ridgecrest again. Earthquake experts said Southern California is likely to experience further aftershocks in the next few days.
In a second report from the US MGA, the firm said, commercial property rates are hardening in certain geographic areas.
“Property risks in California and Florida are getting hit hard with rate increases. We expect this trend to accelerate as we move into the wind and brush fire seasons later this year,” said Kerr.
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