Commercial Rates Continued Up in March, Even for Large Accounts: MarketScout

Commercial insurance rates were up about 5 percent in March, according to the latest barometer from MarketScout and the National Alliance for Insurance Education and Research.

Manufacturing continues to post the largest rate increases compared to prior-year results, followed by contracting, service, habitational and transportation.

Workers’ compensation, professional and small commercial all received more aggressive month-over-month price increases, the survey found.

MarketScout CEO Richard Kerr said the results show that large premium or brand name accounts are no longer being favored with pricing breaks.

“Historically, underwriters have been very aggressive in pricing name-brand or large accounts. Other than the cache or bragging rights, there are few sound underwriting reasons for aggressively pricing large accounts,” Kerr said. “Risk is risk, and exposure is exposure. In March, underwriters more frequently assessed an appropriate premium for large accounts.”

Kerr said the data from March showed a significant reversal in pricing strategy for both large ($250,001 to $1 million premium) and jumbo (more than $1 million premium) accounts.

In February, rate increases for large accounts measured plus 3 percent, and for jumbo account plus 2 percent. These increases adjusted to plus 5 percent for both in March.

“There is also a considerable amount of chatter amongst underwriters regarding pricing in this area, so we will be monitoring the situation very carefully,” Kerr said.

The National Alliance for Insurance Education and Research conducted the pricing surveys used in MarketScout’s analysis of market conditions.