Q3 Commercial, Personal Rates Moderate: MarketScout

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Third quarter 2023 commercial insurance rates remained up, but about 3.7% compared to up about 5% during the second quarter.

According to MarketScout’s Market Barometer, the composite rate for all U.S. lines of commercial insurance business moderated except for business owners policies (BOP), which were plus 5% in Q3 compared to 3.2% in Q2.

“Reinsurers have been tough on insurance company partners the last twenty-four months, says Richard Kerr, CEO of Novatae Risk Group, owner of MarketScout. “We see their stance moderating. The enhanced terms are being passed along to insurers and their customers. Higher interest rates also help support reinsurers’ results, so that could be a part of the reason for moderating rates as well.”

Commercial property rates increased 9% in Q3 – down a bit from being up 10.7% in Q2.

“Some property underwriters do feel rates should continue to increase because of their concern about global warming, which is somewhat affirmed by our hottest summer on record in 2023,” added Kerr.

Looking at industry class, MarketScout said transportation continued to lead with Q3 rate increases of 6% but the rate increase was 7.3% last quarter.

After being up 13.3% in Q2, cyber liability was up 8% in Q3 2023.

Personal Lines

Meanwhile, the Dallas-based distribution and underwriting company said the composite rate increase for U.S. personal lines was 4% for Q3 2023 compared to up 4.4% in Q2 and 5% increase in Q1 to 4.4% in Q2.

“Insurers are feeling better about their results in the personal lines space, resulting in lower rate increases,” said Kerr. Here too, Kerr said the record-hot summer “does create concern.”