After seven plus years of a soft market, the property and casualty industry finally showed consistent rate increases in 2012. Beginning January 2012, the composite rate was up 1 percent but steadily increased over the course of the year. By year end, the average rate increase on property and casualty business in the U.S. was up 5 percent.
Richard Kerr, CEO of MarketScout profiled the 2012 year, "This market turn is not like the last hard market of 2001 to 2005 when rates spiked up as much as 30% in the early stages. For the 2012 market turn, rates have adjusted slowly and steadily without any dramatic spikes. This slow and steady pace could foretell rate increases at a more sensible pace and for a longer period of time."
For December 2012, commercial auto lead the coverage classification in rate increases at plus 6 percent. By account size, small accounts ($0 to $25,000 premium) were hit the hardest with rate increases at 6 percent, while jumbo accounts continued to enjoy the most competitive pricing at plus 3 percent. Measuring by industry, transportation, manufacturing, and service accounts continued with the largest rate increase at plus 6 percent.
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.