Property and casualty insurance rates increased by 5 percent last month
According to MarketScout data, the prices rose in April for policyholders of commercial products.
According to a report from MarketScout, the rates for commercial property and casualty insurance rose by an average of 5 percent in April 2013, when compared to the rates that were being charged a year before.
It was workers compensation and commercial property that saw the largest increases over a year.
The commercial property and casualty insurance and workers compensation saw a combined average rate increase of 6 percent. Surety and employment liability coverage each increased by at least 2 percent on average. Breaking things down further, among various business sectors, it was the manufacturing area that saw the largest increases, at 7 percent. The smallest increases were from public entity and energy accounts, at 4 percent.
Though the property and casualty insurance market is steady, it is headed toward some slow increases.
According to the CEO of MarketScout, Richard Kerr, “The market is bumping along in a continued slow but steady path toward overall increases.” He went on to say that “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.”
He also pointed out that the recent Berkshire Hathaway moves could impact the market if their intention is to step into the primary property and casualty insurance marketplace in any “meaningful way.” Kerr also made reference to the departure of four senior executives from American International Group Inc., who recently moved over to Berkshire Hathaway. This considerably increased speculation over Berkshire Hathaway’s strategy.
Kerr explained that only Berkshire can know exactly what its plan will include for the future and whether or not this will mean a sizeable entry into property and casualty insurance. He said that if the intention is to begin a very large company, then it would impact the way that pricing will occur. Moreover, if the intention is an admitted primary market strategy, that area’s rates could still be influenced by their decision. At the moment, all that is available is speculation regarding the direction that the rates will be taking and on what the pricing strategy at Berkshire will mean.