Commercial property/casualty pricing continued to gently creep upwards in the second quarter, The Council of Insurance Agents & Brokers' quarterly Commercial P/C Market Index Survey revealed. On average, pricing rose at a rate of 4.3 percent compared with 5.2 percent in the first quarter of 2013, according to the charts prepared by Barclays Research based on The Council's data.
Small and medium account pricing continued to rise more than pricing for large accounts.
"There weren't any great surprises in the second quarter," said The Council's President/CEO Ken A. Crerar. "Prices inched up, underwriting tightened and insurers looked to reduce exposure in some critical areas. However, the market hardening appears to have moderated in the last quarter," Crerar added.
The critical areas continued to be property and workers' compensation. The second quarter survey also showed that insurers were still feeling the sting of Superstorm Sandy, the most destructive hurricane of the 2012 Atlantic hurricane season. In fact, insurers were looking carefully at any CAT-prone property exposure on the coast or inland. Brokers across the country reported that insurers were using more wind/hail deductibles.
Brokers also said carriers pulled back on terms and conditions and lowered limits and cover for exposures, such as storm surge, flood and off-site power, among others.
One broker in the Midwest noted that flood mapping by carriers was fraught with uncertainty and inconsistency and suggested there should be a universally recognized and uniform flood mapping model.
Workers' compensation again was a tough sell, particularly where loss experience was poor. A broker in the Northwest reported that "Workers' compensation was the line with the strongest rate [increases] and non-renewals." A similar story played out in most regions of the country with some brokers reporting that carriers were backing away from the line.
Demand for insurance appeared to hold steady in the second quarter, according to the brokers responding -- an indication that the economy is slowly recovering.
The survey showed that the top concern among brokers continued to be finding young talent to fill the shoes of the aging and retiring broker force. Uncertainty surrounding health insurance reform also remained a great concern.
The Council's survey is the oldest, most authoritative source of existing market conditions, pricing practices and trends, dating back to 1999.