Brokers report ‘difficult quarter’ as P&C market hardens

By Erin Ayers on March 2, 2020

By Erin Ayers, Advisen

Commercial insurance prices continued rising in the fourth quarter of 2019 with an average increase of 7.5 percent across accounts of all sizes as tracked by the Council of Insurance Agents & Brokers (CIAB).

“Q4 was a difficult quarter for insurers, brokers and clients alike,” said Ken A. Crerar, CIAB president and CEO. “The increased frequency and severity of commercial auto, umbrella and [directors and officers liability] D&O claims were linked with higher premiums and significant tightening in underwriting. While other lines did not experience such notable shifts, there was evidence of the firming market. It’s crucial now for brokers to position themselves as “trusted advisors” by helping their clients understand and navigate current market conditions.”

Agents and brokers responding to CIAB’s survey reported worries from their clients that prices would keep rising as coverage and limits continue to tighten.

Nearly every line of business — with the exception of workers compensation — experienced premium increases, with larger accounts seeing higher price hikes averaging 9.4 percent, compared to an average of 8.0 percent for medium accounts and 5.2 percent for small accounts.

CIAB reported that commercial auto and umbrella risks experienced the highest average increases of 10.5 percent and 13.6 percent, marking the first time since 2003 that pricing increase have reached double digits. Umbrella pricing was “noticeably more accelerated” than other lines with higher attachment points for coverage.

Survey respondents also reported insurers’ refusals to write standalone commercial auto. CIAB cited distracted driving, claim frequency and severity, lack of qualified drivers, and larger claim settlements among the reasons for the tough auto market.

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eayers@advisen.com'

Erin is an editor at Advisen. She has 15 years of journalism experience. Prior to Advisen, Erin covered property-casualty insurance for 13 years as editor-in-chief of The Standard, New England’s Insurance Weekly. Erin is based in Boston, Mass. Contact Erin at eayers@advisen.com.