In March, MarketScout's Market Barometer showed that rateincreases picked up steam ever so slightly to plus-3%, but inApril, a multitude of factors caused rates to moderate again toplus-2%.

MarketScout CEO Richard Kerr says, “The April compositecommercial rate remained in positive territory at plus-2%, but wemay see rate reductions by year end if the current trend continues.If you are in the market on a daily basis, you can almost feel achange in the wind. No reasonable insurer wants rate reductions.However, everyone seems to feel they are coming.”

MarketScout says insurers are finding reasons to fight overbusiness, such the impact of reinsurance pricing and thecompetition there from catastrophe bonds and insurance-linkedsecurities.

Some lines, Kerr says, may be on hold for the moment.“Catastrophic property rates will probably hold steady in the nextfour months because we are on the cusp of hurricane season,” henotes, adding that if the “wind doesn't blow, get ready for a solidround of rate reductions at year-end.”

Workers' compensation, Kerr says, remains a tough class, withseveral major carriers exiting the market recently and otherscutting back their business in this line. “We expect workers'compensation insurers to hold steady with small rate increasescontinuing,” he says.

EPLI, workers' comp and commercial auto led the way for Aprilrate increases at 3%. No line showed rate decreases, but businessinterruption, inland marine, fiduciary, crime and surety were allup by just 1%.

In March, small, medium and large accounts were all up by 3%while jumbo accounts increased by 1%. In April, only small accountsremained at plus-3%. Medium accounts were up by 2% and large andjumbo accounts were both up by 1%.

Personal lines

Meanwhile, personal-lines rates held steady at 3% in April.Homeowners rates—for homes valued both over and under $1million—and auto rates were unchanged in March at plus-3%, whilepersonal articles rates were unchanged at plus-2%.

Kerr says, “Spread of risk is extremely important for personallines insurers. Those that are heavily burdened withcatastrophe-exposed business are taking a big chance. We are notinginsurers are actually requiring a balanced book if agents want toaccess their cat capacity. This is good news for those agents withwidespread operations because they can offer an insurer business inthe central US to balance their cat-exposed book. Those who are,for instance, only in Florida, will find themselves getting paidless commission and having access to less capacity.”

PropertyCasualty360