FOR IMMEDIATE RELEASE
Commercial P&C Pricing Increases Continue Easing in First Quarter of 2014, According to CIAB Survey
WASHINGTON, D.C. – The 2013 year ended with a slight slowdown of commercial property and casualty pricing increases in the fourth quarter, according to The Council of Insurance Agents & Brokers’ quarterly Commercial P&C Market Index Survey.
On average, pricing rose for large, medium and small accounts at a rate of 2.1 percent compared with 3.4 percent in the third quarter of 2013, according to the charts prepared by Barclays Research based on The Council’s data.
“We didn’t see any significant changes last quarter, which is not surprising,” said Ken A. Crerar, president/CEO of The Council. “Underwriting seems to have remained disciplined. It appears that new capacity in the market, such as the arrival of Berkshire Hathaway Specialty Insurance, helped dampen pricing a bit last quarter. That, and the fact that catastrophe exposures were low, added up to a more stable pricing environment overall,” said Crerar.
A few lines – commercial property, workers’ compensation and employment practices liability – continued to show signs of flattening in the fourth quarter – declining slightly more than some other lines. However, brokers’ experiences on those lines varied across the country depending on location and circumstances. Workers’ compensation in California, for example, still showed fairly significant rate increases, according to survey results.
Across the country, brokers said carriers’ appetite for new business was healthy and aggressive. Some carriers were more willing to negotiate rate increases on good existing business, but terms and conditions continued to be pretty tight outside of one off relaxations of them on the part of standard carriers. And any account with bad experience still met with close scrutiny.
Reports varied on underwriting capacity. Some brokers reported that capacity increased across all lines of business, while others saw “no change” at all, or said it “depends on [the] carrier.” Flood, property CAT re-insurance and construction risks were reported up in the Northeast, while earthquake capacity was reported up in the Pacific. “Capacity increased significantly,” said a broker in the Southeast. “We expect even more in 2014.”
The brokers also noted more interest in products such as cyber liability insurance in the fourth quarter as opposed to the last three months. “This is just the tip of the iceberg,” said a broker from the Midwest. “As the business technology landscape evolves, cyber and technology Errors & Omissions continue to integrate further.”
On other topics, the brokers said that talent acquisition and development, and perpetuation of account managers keep them up at night, while implementation of new technology is a trend on the horizon. The top political issue facing the country remained the national debt, but a majority indicated lack of leadership in the country was a major problem.
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
