P&C Rates Up through Q4 with Increases Moderating

MarketScout data shows commercial property and casualty (P&C) insurance rates rose through the fourth quarter of 2021, with the composite rate standing at 5.8 percent versus 6.8 percent in Q3.

Source: Reinsurance News | Published on January 6, 2022

premium increases down or flat

According to MarketScout, the most significant rate increases in the fourth quarter were for umbrella, property, and directors and officers liability.

However, with the exception of BOP, every line of coverage increased at the same or lower rate in the fourth quarter compared to the previous third quarter.

Rates fell for all account sizes, with medium-sized accounts falling to 5.3 percent in the fourth quarter from 7.3 percent in the third.

Furthermore, all industry classifications were assigned lower rate increases in the fourth quarter, with habitational rates moderating the most, increasing by 7% compared to 9% in the third quarter of 2021.

"The fourth quarter of 2021 reflects moderation in rate increases," said MarketScout CEO Richard Kerr. "However, when comparing rates for the entire year 2021, rates increased from +5.6% in 2020 to +6.6% in 2021."

Personal lines insurance rates increased 4.25 percent in the fourth quarter of 2021, according to MarketScout, with homeowners, personal articles, and auto rates all moderating slightly from the third to the fourth quarter.

"The composite national personal lines market continues to steadily adjust rates as needed, with no year-over-year massive rate increases," Kerr added.

"However, for CAT-exposed properties, rate increases can be dramatic; as much as 25 to 40% in areas such as California's wildfire corridors or southern portions of Florida."