U.S. commercial liability, property insurance premiums predicted to rise

Moody’s Investor Services Inc. anticipates commercial property and casualty insurance carriers in the United States will increase their rates this year while combined ratios will drop.

A report released Monday by New York-based Moody’s – titled US P&C Insurance Pricing Generates Margin Expansion, Rate Needed in Casualty — was based on survey data from issuers rated by Moody’s.

“Moody’s notes that commercial insurers expect average rate increases of about 7.5% for policies written in 2013, which is up from an increase of 6.5% for 2012 and 2.5% for 2011 for the five major liability lines,” the firm stated in a press release.

Those five lines are workers’ compensation, commercial general liability, professional liability, commercial auto and commercial multiple peril. They “represented 28% of 2012 industry net premiums written and 60% of carried loss and loss adjustment expense reserves as of year-end 2012 for the industry,” Moody’s stated.

The ratings firm also anticipates that combined ratios in commercial lines will drop, from about 106% in the 2012 accident year to about 101.5% for the 2013 accident year. Moody’s also predicts that after that, the combined ratio will drop another 4.5 points to 97% in 2014 “if current trends hold.”