U.S. commercial lines composite rate index up 5% in April: MarketScout

The composite rate index for U.S. property, casualty and professional liability business is plus 5%, matching the increase from March 2013, according to MarketScout, a Dallas-based insurance exchange with 35,000 users throughout the United States, mainly independent retail agents.

Commercial property rates were up the most of all coverage at plus 6%, the insurance exchange reported. Business interruption was up 3%, general liability was up 4% and commercial auto was up 5%.

“The market is bumping along in a continued slow but steady path towards overall increases,” according to Richard Kerr, CEO of MarketScout. “For the rest of 2013, we expect some months with lower composite increases than prior months but the general direction of rates will be upward, unless new capacity enters the market. The recent movements by Berkshire Hathaway could affect the market if the plan is to enter the primary property and casualty market in a meaningful way.”

In personal lines, the U.S. composite rate index was up 3% in April as compared to the 4% increase in March.

Homeowners rates for homes under $1 million were up 3 percent while homes over $1 million experienced a rate increase of plus 4 percent. Personal auto insurance rates measured plus 3 percent and personal articles (wine collections, jewelry and art) paid 3 percent more than last year.

“April traditionally is a good month for personal lines insurers because the spring storms have not yet hit, thereby avoiding tornado and hail claims, and flooding usually occurs a bit later in the year,” Kerr pointed out.

“Normally there are no hurricanes or brush fires; however, there was a small brush fire underway a few days ago, which has since diminished. So, absent an earthquake, April is typically a pretty good month. Perhaps the psychology of lower filed claims and the time passing since Super Storm Sandy had some impact on insurers pricing.”