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Contact: Brianne Spellane
Director of Marketing & Communications


WASHINGTON, D.C. – February 5, 2016 – The Council of Insurance Agents & Brokers’ fourth quarter Commercial P/C Market Index Survey showed that 2015 closed as it began – with continued decreases in commercial property casualty rates across small, medium, and large accounts.

Large accounts once again experienced the biggest decrease at 3.7%, followed by medium-sized accounts at 3%, and small accounts at 1.5%. Small accounts even saw some slight increases, particularly the Pacific Northwest and the Southwest.
“Consistency was the theme of 2015 as we saw decreased rates across all size accounts in all four quarters,” said Ken A. Crerar, president/CEO of The Council. “This soft market presents both challenges and opportunities for brokers. Lower rates meant less revenue but as the economy improved, policyholders were seeking increased limits and additional lines of coverage. This gave our members a chance to be creative and provide added value to their clients beyond just negotiating lower rates.”

Rates continued the downward trend across most lines. The largest decreases were observed in Commercial Property, down 3.5%, and General Liability, down 3.4%. Umbrella policy rates decreased an average of 2.8% and Workers’ Compensation rates decreased an average of 2.6%.

One respondent from a medium sized northeastern firm, focused on middle market business, said that the fourth quarter “saw further movement in the downward pricing trajectory. Profitable accounts garnered concessions in pricing and retentions as carriers appeared to try to close fiscal 2015 with an aggressive top line finish.”

A few lines did see rates increase slightly, including Commercial Auto (2.7%), Employment Practices (1.6%), and Directors & Officers Liability (0.9%). All three of these were a continuation from the third quarter. Respondents agreed that capacity in the market was plentiful, particularly for Commercial Property, but also for Workers’ Compensation, General Liability, Inland Marine and Umbrella coverages.

Another respondent from a Minnesota-based full-service independent broker noted that there was “still a strong sense of discipline incorporated into the underwriting process but an even stronger desire not to lose good business.” Carriers were willing to cooperate “to establish acceptable pricing expectations early on in the renewal process. Favorable terms remained available as marketplace behavior suggested better terms were being offered by the competition.”

On the other side of the coin in a soft market, carriers sharpened their focus on improving loss ratios with risk management and claims handling. “While accounts have been underwritten to loss ratio, there seems to have been an increased focus on the ratios and what clients were doing to reduce risk,” said one respondent from a specialty program-focused insurance agency in Pittsburgh, Pa.

“We already have one major storm in the books so we’ll be watching carefully to see what that does to property rates in the first quarter,” said Crerar. “We’ll also continue to monitor how trends and advancements, such as industry consolidation, the burgeoning cyber insurance market and the use of technology in modeling and underwriting, impact rates and capacity in the insurance market in 2016.”

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