Posted on 08 Apr 2013 by Neilson
Based upon the composite results of commercial business placed across the United States in March 2013, placing accounts that command large premiums no longer assures the buyer of a more aggressive pricing strategy.
Richard Kerr, CEO of MarketScout confirmed the results noting, "Historically, underwriters have been very aggressive in pricing name brand or large accounts. Other than the cache or bragging rights, there are few sound underwriting reasons for aggressively pricing large accounts. Risk is risk and exposure is exposure. In March, underwriters more frequently assessed an appropriate premium for large accounts."
Mr. Kerr went on to note, "Our most recent data showed a significant reversal in pricing strategy for both large ($250,001 to $1,000,000 premium) and jumbo (over $1,000,000 premium) accounts. In February, rate increases for large accounts measured plus 3 percent and for jumbo account plus 2 percent. These increases adjusted to plus 5 percent for both in March. There is also a considerable amount of chatter amongst underwriters regarding pricing in this area so we will be monitoring the situation very carefully."
Workers' compensation, professional and small commercial all received more aggressive month-over-month price increases.
Manufacturing continues to post the largest rate increases as compared to prior year results followed by contracting, service, habitational, and transportation.
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.