US P/C rates up 5.9% in Q2: MarketScout

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MarketScout data shows that US property and causality (P/C) insurance rates are stabilizing at a composite increase of 5.91% in Q2 of 2022, matching the rate increases of Q1.

MarketScout found cyber rates continue to increase the most at 21.3% up from 19.7% in Q1 of 2022.

Umbrella rates moderated slightly by increasing 8.7% in Q2, compared to an increase of 9.7% in Q1.

Medium-sized accounts experienced the largest rate increase in Q2 with 7%. By industry classification, transportation is still being assessed with the highest rate increase of 8.7%

Richard Kerr, CEO of MarketScout outlined the current rating environment by noting, “Mother nature and litigation heavily impact rate increases, but as we all know, we can’t realistically control either. Hurricane season is upon us and soon to be followed by wildfire season. If we have big events, the increase in property rates will come quickly.”

“Inflation can create a need for rate increases, so we may see that impact over the next four quarters. As for rate decreases, it’s possible higher interest rates could provide insurers with additional investment income which could moderate rate decreases, especially on long tail business.”

US Personal lines rate increases in Q2 of 2022 were 5.16%, almost mirroring the 5.2% increase in Q1.

Insureds in the US are experiencing rate increases partly because of inflation on home and auto repair, as well as the increased value of fine art, collectables, and jewellery.

Kerr noted, “The Council for Insuring Private Clients gathered in May 2022 with over 250 personal lines professionals sharing information and ideas. The consensus was to expect continued significant rate increases for all lines of personal insurance in areas affected by CAT perils.”

“We believe alternative solutions will be developed to provide additional capacity in Florida and California.” “Premium increases and coverage restrictions will drive these new solutions. 40-50% rate increases are not unusual in CAT-prone areas of Florida and California.”

The post US P/C rates up 5.9% in Q2: MarketScout appeared first on ReinsuranceNe.ws.

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