P/L Rates Up in Cat-Prone Areas
MarketScout reports that the composite rate for U.S. personal lines was up 3.5 percent in the second quarter of 2019, an increase of 2 percent in the first quarter. Rates in some catastrophe areas are up as much as 50 percent.
“Rates for homes are up in all locations; however, Florida and California are getting hit the hardest. Large admitted markets are cutting back in Florida, resulting in more business going to the more expensive non-admitted markets. In California, most insurers are running from new business and remain fearful of another torturous wildfire season,” said Richard Kerr, CEO of MarketScout, says.
“Some homeowners are being assessed 50 percent rate increases along with much larger deductibles. Only three months ago, these rate increases were around 20 percent-25 percent, so the trend is up. This upward trajectory is likely to continue for the rest of the year, especially with the Fourth of July earthquake reminding underwriters [that] quake exposure is very real,” Kerr said.