More evidence that rates are headed north surfaced yesterday. The latest quarterly property/casualty survey from the Council of Insurance Agents & Brokers came out. And as the chart above illustrates, there’s no surprise here: rates are on the rise in the face of insurer catastrophe losses, falling reserves and rising underwriting discipline.
Commercial property/casualty pricing rebounded in the fourth quarter of 2011, according to The Council of Insurance Agents & Brokers’ quarterly Commercial P/C Market Index Survey. On average, small, medium and large account pricing increased 2.8 percent last quarter, compared with a -5.4 percent decline in the same period last year. The market hit its low point in the third quarter of 2007 with an average -13 percent decrease and has been slowly clawing its way back up ever since.
“It’s clear from the data that the market continued its upward momentum in the fourth quarter,” said Ken A. Crerar, president/CEO of The Council. ““Capacity was still strong, but prices rose in the face of declining underwriting profitability, dwindling reserves and huge catastrophic losses.”
Another key finding was, as anticipated, the effect that RMS 11 is having on property pricing.
Carriers were “reviewing all property based on RMS11 modeling,” said one broker from the Southeast. “The RMS CAT Modeling for property was used widely — more property insurers since the third quarter,” said a broker from the Northeast. “Many clients saw this for the first time.”
Large buyers fared better than their smaller counterparts but there were increases across the board. All told, here are the full results broken down by account size.
