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Commercial Prices — A Peek at Next Year & Beyond

Posted By Administration, Tuesday, November 19, 2019

Several reports have been issued in the last couple of weeks on commercial insurance pricing. If the predictions come true, commercial insurance lines are looking pretty good for the next year or so.

The first report comes from USI Insurance Services and it is titled Q4 2019-2020 P&C Insurance Market Outlook Report. USI lists 28 lines. It shows the results so far this year and offers predictions for the rest of 2019 and into 2020.

Just one line — workers’ compensation — is struggling. Seven stayed the same. The others are doing very well.

 

Commercial Line

Mid-2019

4th Quarter & 2020

Property non-catastrophic good loss history

Up 10%

Up 10% to 20%

CAT property minimal loss history

Up 10% to 20%

Up 25% to 40%

CAT or non-CAT property poor history loss

Up 10% to 40%+

Up 30% to 60%

Primary general and products liability

Flat to up 15%

Up 5% to 10%

Primary auto liability fleet lower than 200, good loss history

Up 5% to 10%

Up 10% to 15%

Primary auto liability fleet lower than 200, poor loss history

Up 15%+

Up 15% to 25%

Umbrella & Excess Liability, mid-market buyer

Up 5% to 20%

Up 15% to 30%

Umbrella & Excess Liability, risk management buyers

Up 5% to 20%

Up 15% to 30%

Directors and Officers public company

Up 10% to 30%

Up 25% to 50% and up to 100% if troubled

Private company management liability

Up 5% to 10%

Up 5% to 20%

Crime

Down 5% to up 5%

Up 5% to 25%


Marsh also did a report. The Marsh Global Insurance Market Index said the third quarter of 2019 saw commercial insurance rates rise an average of 7.8%. It’s the largest jump since Marsh started the survey in 2012. “Pricing increased in all three major product lines — property, casualty, and financial and professional liability — for the second straight quarter,” the report said.

Taking the total planet into consideration:

  Property risk rates rose 10.2%

  Financial and professional lines are up 14.2%

  Casualty increased 0.8%

 

Here’s a breakdown by region:

  The U.S. — 6.4%

  Pacific — 18.8%

  U.K. — 11.8%

  Asia — 5.1%

  Latin America and the Caribbean — 4.6%

  Europe — 4.2%

As for the United States, “The general trend was toward a firming of prices across the majority of coverage lines. There has been a steady upward trend in pricing in the US since the third quarter of 2017,” the report said.

Pricing for property in the U.S. rose 12.9% in the third quarter and has gone up for eight straight quarters. Casualty dropped 0.7% in the third quarter after rising for the last two years.

Swiss Re’s Global Economic and Insurance Outlook 2020/21 thinks the rate hikes we’ve been seeing are going to remain and rise by close to 3% in 2020 and 2021. “Pricing has strengthened, driven by rising loss costs in property catastrophe and U.S. casualty, and we expect this to continue,” the report said.

The report says growth in the U.S. will be 1.6%.

 

Source links: Business Insurance, Carrier Management, Insurance Business America

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