Rates Up Again in Q1 as Signs May Point to ‘Stronger Increases’: MarketScout

During the first quarter 2022 buyers of commercial insurance saw average rate increases across all lines of 6%, according to MarketScout’s Market Barometer.

The average increase remained consistent compared to the average increase of 5.8% observed in the fourth quarter 2021 but CEO Richard Kerr said rates started to go up more in March, “which could be the beginning of stronger increases for the next several quarters.”

By industry, rates for transportation and habitational risks increased the most at 10.3% and 8%, respectively.

Looking at specific lines of coverage, rate increases for cyber insurance were far more than other lines, at 19.7% on average, MarketScout said. Excess Umbrella rates were up 9.7% and D&O rates increased 8.7% during the first quarter.

Turning to personal lines, first quarter rates increased 5.2%, according to the Market Barometer.

“We expect homeowners rates across the U.S. to continue to increase,” Kerr said. “What used to be considered relatively benign catastrophe prone areas of the U.S. are now experiencing more and more claims. Further, several major insurers are dramatically cutting back their appetite for tough-to-place homes. This will impact the availability of coverage and result in significant rate increases or coverage restrictions for many homeowners whose insurer will issue a notice of non-renewal.”

Kerr said some homes considered high risk may see rate increases of as much as 35%.

Homes valued at more than $1 million during the first quarter experienced rate increases of 7%, up from 6.3% during the fourth quarter, while homes under $1 million saw rates increase more than 5%.

Rates for personal auto were relatively stable at plus 4.3% in the first quarter.