U.S. commercial soft market cycle “broken”: MarketScout

For the first time in more than six years, the U.S. composite commercial market has seen an average rate increase, signalling the end of the soft market, according to MarketScout.
Jumbo accounts, those worth more than $1 million, are the only segment of the market measuring a rate decrease. These accounts were down 1% in November 2011, MarketScout reported in its November 2011 ‘Market Barometer.’
All other classifications, either by coverage, industry group or account size, measured flat or up as compared to one year ago at this same time.
MarketScout added that the National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout’s analysis of market conditions. The findings helped corroborate MarketScout’s findings.
The following coverage classes saw the largest increases:
•Commercial property, 2%;
•Business Owner Policy (encompassing all major property and liability risks in one policy), 2%; and
•Workers’ compensation, 2%.
Small accounts (up to $25,000) saw average rate increases of up to 2%. Medium accounts ($25,001-$250,000) saw an increase of 1%, MarketScout reported.
“After six years and eight months, the soft market cycle has finally broken,” said MarketScout CEO Richard Kerr. “November 2011 is the first composite rate increase since the soft market began in February 2005.”