FOR IMMEDIATE RELEASE
Commercial P&C Pricing Continued Upward Trend in First Quarter, According to The Council’s Survey
WASHINGTON, D.C. – Commercial lines pricing took another bounce upwards in the first quarter of 2013, according to The Council of Insurance Agents & Brokers’ quarterly Commercial P/C Market Index Survey. On average, pricing rose at a rate of 5.2 percent compared with 5 percent in the fourth quarter of 2012.
“The first quarter was a tough market for underwriting and for commercial clients who were hit with higher prices,” said The Council’s President/CEO Ken A. Crerar. “Carriers backed off risky business, tightened underwriting and pressed for higher pricing and deductibles on renewals. The upshot is more business is moving into the alternative markets.”
One broker called it a “Jekyll and Hyde” market with carriers seeking rate increases on renewals while good, new business is still aggressive.
The survey revealed a number of trouble spots. Workers’ Compensation continued to be a hard line to place. Brokers across the country reported large price increases and in some areas capacity shrunk. A Midwest broker said some carriers had no appetite for the workers’ compensation business at all. Another broker said workers’ compensation was driving a lot of the underwriting decisions forcing business into mono-line or alternative markets.
The survey also reflected an on-going “Superstorm Sandy” effect with tighter underwriting on property risks with CAT exposure on the eastern coast. A broker in the region reported that “Insurers pushed for higher deductibles for named windstorm and flood in the Northeast, especially for insureds with claims from Superstorm Sandy.” Another noted that flood deductibles increased and carriers were lowering limits or excluding flood coverage.
Meanwhile, the Midwest struggled with wind/hail deductibles, which were up one percent to two percent, according to a broker there. The Southeast also experienced higher deductibles, exclusions for wind/hail and tighter underwriting on commercial property in general.
A few brokers reported a capacity problem with employment practices liability coverage. Reflecting what brokers experienced from coast to coast, a broker in the Southwest said “EPLI rates [were] up dramatically over the last six months, coverage is being restricted and retentions are increasing.”
There was good news. Fifty-two percent of those responding said demand for insurance was up. As for what kept them awake at night – the majority answered finding new talent and the federal deficit.
The Council’s survey is the oldest, most authoritative source of existing market conditions, pricing practices and trends, dating back to 1999.
P&C Market Survey Contact:
Zach West
Senior Content Specialist/Copy Chief, Leader’s Edge
