Council Foundation Logo Leaders Edge


Contact: Brianne Spellane
Director of Communications


WASHINGTON, D.C. – July 29, 2015 – The Council of Insurance Agents & Brokers’ most recent quarterly Commercial P/C Market Index Survey shows that rates declined across all lines in Q2, continuing the downward trend from Q1.

The market experienced premium rate decreases in general across all size accounts, by an average of 3.3%. Large accounts once again saw the steepest drop of 5.2%, while medium sized accounts fell 3.5%, and small accounts fell 1.3%.

“These results are consistent with the decreases we saw at the end of 2014 and Q1 2015 across all account sizes,” said Ken A. Crerar, president and CEO of The Council. “As the soft market continues in 2015, carriers are competing for good risks and are willing to work with brokers on price and terms.

Commercial property, general liability, and workers’ compensation premiums were most frequently reported down across all regions, with a slight uptick in commercial auto. A broker from the Southeast noted that there is “still excess capacity in the marketplace. Carriers want to write new business, especially if it’s larger and has a good loss history.” One respondent from the Southeast commented that the market saw “more aggressive pricing for workers’ comp and property lines” while another broker from the Midwest stated, “underwriting capacity for property has increased significantly as evidenced by rate decreases and improved terms and conditions.”

Average flood insurance rates also saw an uptick across all regions, most frequently reported in the Southeast and Southwest regions. This increase is likely due to premium increases, assessments, and surcharges, mandated by both the Biggert Waters Act and the Homeowner Flood Insurance Affordability Act (HFIAA), which went into effect April 1.

Nearly 90% of respondents said that take-up rates had increased in the second quarter of this year. One Midwest broker explained that take-up rates were increasing partially because “premium savings are driving interest in new lines of coverage and/or higher limits.”

Respondents also overwhelmingly agreed that, as we saw last quarter, “Cyber Liability is getting more traction.” This trend is expected to continue as the cyber insurance market matures, new insurers, products and capacity come to market, and the true extent of companies’ cyber exposure is realized. Respondents also highlighted the notable consolidation in both the carrier and broker sectors. The insurance industry has been illustrative of the broader merger and acquisition activity in the U.S. which surged past $1 trillion in the first six months of the year.

“The number and magnitude of recent industry mergers are bound to lead to questions about whether we are entering another echelon of M&A activity where faster and more pervasive consolidation is likely,” said Crerar. “However, the tab for mergers and acquisitions in the U.S. during the first half of this year is the highest ever for any nation as companies take advantage of historic low interest rates and record cash piles to invest in future growth. Active M&A has always been a constant in the insurance industry and carriers and brokers have shown time and time again that they are adaptive, creative, and resilient during such changes in the competitive landscape.”

The Council’s survey is the oldest source of commercial property/casualty market conditions, pricing practices and trends, dating back to 1999.