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US P&C Composite Rate Increased 4.5% in First Quarter 2020

COVID-19 Impact Looms

 

Rate increases for business insurance buyers in the United States were 4.5 percent in first quarter of 2020 as compared to 5 percent in the last quarter of 2019. Workers' compensation rates were down 1.25 percent, the only coverage with a rate reduction.

The MarketScout Market Barometer includes premium movement in all sizes of businesses, industries and coverages.

Richard Kerr, CEO of MarketScout noted, “Rates in the first quarter of 2020 were mostly stable. The pricing impact of COVID-19 will be born out in the second, third and fourth quarter of 2020. Lower exposure base and the possibility of governmental intervention in coverage application will have a dramatic impact on the pricing for the rest of the year.”

The National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout's analysis of market conditions. These surveys help to further corroborate MarketScout's actual findings, mathematically driven by new and renewal placements across the United States.

A summary of the first quarter 2020 rates by coverage, industry class and account size is set forth below.
 
By Coverage Class
Commercial Property Up 4.5%
Business Interruption Up 4%
BOP Up 4%
Inland Marine Up 4%
General Liability Up 4.25%
Umbrella/Excess Up 4.5%
Commercial Auto Up 7%
Workers’ Compensation Down 1.25%
Professional Liability Up 6.25%
D&O Liability Up 7.5%
EPLI Up 4.5%
Fiduciary Up 3%
Crime Up 4%
Surety Up 1%
 
By Account Size
Small Accounts Up 4.25%
Up to $25,000
Medium Accounts Up 4.25%
$25,001 – $250,000
Large Accounts Up 4.5%
$250,001 – $1 million
Jumbo Accounts Up 5.5%
Over $1 million
 
By Industry Class
Manufacturing Up 4.5%
Contracting Up 5%
Service Up 4.5%
Habitational Up 7.25%
Public Entity Up 4.25%
Transportation Up 6.5%
Energy Up 3.25%
 

For detailed rating analysis or market projections by industry class, coverage or account size, contact Vilma Scott at vscott@marketscout.com.

About MarketScout

MarketScout, an insurance distribution and underwriting company headquartered in Dallas, compiles the Commercial and Personal Lines Market Barometers. The firm is a Lloyd's Coverholder and MGA for U.S. insurers. MarketScout owns and operates the MarketScout Exchange as well as over 40 other online and traditional underwriting and distribution venues. MarketScout is founder of the Council for Insuring Private Clients (CIPC) and administers the Certified Personal Risk Manager (CPRM) designation in partnership with The National Alliance for Insurance Education and Research. MarketScout has supported innovation and entrepreneurialism via the Entrepreneurial Insurance Alliance (EIA) since 2007. The EIA supports start up entrepreneurs and innovators via financial, advisory and distribution support. In 2017, MarketScout founded MarketScout InsurTech (MIT) venture fund. In January 2018, MarketScout launched its Incubator to accelerate start-up MGAs and assume operational functions for existing MGAs and insurers. MarketScout has offices in Arkansas, California, Florida, Illinois, Nebraska, Pennsylvania, South Carolina, Tennessee, Texas, and Washington, DC. For more information, please visit us at MarketScout.com. California license #0D60423