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Commercial P/C Rates Up One Percent in October

MarketScout reports that commercial property and casualty insurance rates increased 1 percent in October, and commercial auto insurance had the largest increase of 3 percent...
November 13, 2014

MarketScout reports that commercial property and casualty insurance rates increased 1 percent in October, and commercial auto insurance had the largest increase of 3 percent. Among all industry classes, contractors experienced the largest increase of 3 percent on average. Smaller accounts experienced larger increases, averaging 2 percent, while large accounts saw relatively flat pricing. As has generally been the case in recent years, the smaller the account, the larger the rate of increase, with the smallest accounts reporting two percent rate increases while the largest remained flat.

"As expected, the U.S. composite commercial rate continues its slow slide," said MarketScout CEO Richard Kerr in a statement. "We are almost completely past hurricane season, so we expect continued pressure on property rates. Workers' compensation rates are also down from last month; however, a few large insurers could be facing some challenges on their comp book. If so, this could moderate the slide in W/C premiums."

What It Means to Agents: These are October numbers only and are an overall, countrywide averaging. Individual agency experiences will differ. However, in looking at the different data points as a whole, a continuing trend is the cost-effect that the "contractor classes" have across the C/L auto, W/C and small-to-mid-sized accounts areas. It is also too soon to detect what rating adjustments insurers may need to make in response to continuing cyber-related events, which are expected to impact across multiple liability covers.

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