Insurance rates continue to rise in U.S. market

Several commentators have noted single-digit increases in commercial insurance lines, hovering between 4% and 7% in most areas of business.

While the premium tightening is widespread, there are few signs of a full hardening of the market, according to New York-based investment bank Keefe, Bruyette & Woods (KBW) Inc.

“The rate environment does continue to gradually improve, helping to offset the crushing pressures of lower investment yields,” said KBW in a recent report on the U.S. property and casualty insurance industry. It observed that rates are generally increasing 5% across most lines.

“This is approximately around the same level from where rates were earlier in 2012, indicating that there appears to be no momentum or acceleration of rates into a traditional hard market,” KBW noted.

Another industry observer, MarketScout, recently said that its commercial insurance market barometer put average rate increases at 5% for August in commercial and personal lines – up from 4% for the months of May to July this year.

The Dallas-based electronic market exchange also noted that workers’ compensation and general liability rates rose 6% in August, while premiums for directors’ and officers’ (D&O) liability increased a point to 4% from 3% in July.

Meanwhile, Travelers Cos. Inc. chief executive officer Jay Fishman said commercial insurance rates increased on average 7.7% so far in the third quarter, up from 7.2 % in the second quarter.

“We continue to be successful in achieving rate gains,” Fishman told Reuters news service. “We’re achieving about what we’re attempting to achieve. So far, the competitive environment is allowing us to achieve the rate gains that we are seeking.”