National Underwriter - April 16, 2012

BY MARK E. RUQUET AND PHIL GUSMAN

Rates are rising, multiple studies agree—even global- property rates in non-catastrophe-exposed areas. But at least one firm, aLirt insurance research, maintains the industry has not yet reached its “tipping point” for a hard-market turn.

in March, says Dallas-based online-insurance exchange Marketscout,

commercial-insurance rates climbed by 3 percent, outpacing February’s 2-percent increase.

Marketscout says Commercial Property and Workers’ Compensation lines led the way with increases of 4 percent. Other lines of business were up 1-2 percent. Fiduciary and Crime were the exceptions, coming in flat.

“Our results continue to show a slow and steady path toward rate increases in all segments, be it by line of coverage, industry group or accounts size,” says Marketscout CeO richard Kerr.

By account size, small, medium and large accounts were up 3 percent while jumbo accounts (with more than $1 million in premium) were up 2 percent.

in another sign of price-shifting, an april 10 report by Marsh states that in Q1 2012, global-property insurance rates rose in both catastrophe- and non-catastrophe-exposed areas. Previously, reports had

indicated that only catastrophe-exposed
regions were seeing rate increases.
in the U.s., Marsh says non-
catastrophe-exposed property
risks climbed by up to 10 percent.
Catastrophe-exposed risks, meanwhile,
increased between 10 percent and 20
percent.
around the globe, Marsh says
it expects rates to continue rising
moderately for both catastrophe-
and non-catastrophe-exposed
risks.

Marsh says the U.s.
primary-casualty
market “continued
to show signs of
stress in the quarter,
and rates overall are
expected to increase,
although in a tight
range—typically a flat-to-
5-percent increase at
renewal—for all lines.”
the Workers’ Compensation market
in the U.s. saw combined ratios at their
highest levels in more than a decade in
2011, Marsh says, as claims frequency and
severity continued to grow.
However, while property and casualty
rates are undoubtedly on the upswing,
aLirt maintains that there is still no
concrete evidence of a hard-market turn
because financial indicators have not
reached a tipping point.
the Windsor, Conn.-based firm, in its
“Year end 2011 P&C industry review,”
says that in analyzing trends for the past 17
years for the leading 100 U.s. personal- and
commercial-lines insurers, the financial
stress insurers experienced last year is not
close to past hard-market-turn experience.