Commercial p&c pricing in U.S. steady in third quarter, some brokers reporting addition of wind/hail deductibles

Indications that the commercial property/casualty market in the United States was hardening have tapered off, with pricing in 2013 Q3 similar to the second quarter of the year, reports the Council of Insurance Agents & Brokers (CIAB).

“The market looked a lot like the second quarter,” Ken Crerar, president and CEO of CIAB, says in a statement issued Tuesday. “Pricing in general increased modestly last quarter. But without making any predictions, there were indications that the market hardening tapered off,” Crerar says.

CIAB’s quarterly Commercial P/C Market Index Survey shows that commercial p&c pricing remained steady, notes a statement from the council, whose members annually place 85% of U.S. commercial p&c insurance premiums.

Charts prepared by Barclays Research, based on CIAB data, show that, on average, pricing rose for large, medium and small accounts at a rate of 3.4% compared to 4.3% in the second quarter of 2013.

More specifically, the pricing increases were as follows: small accounts, 3.8% in 2013 Q3 compared to 4.6% in 2013 Q2; medium accounts, 3.7% compared to 4.7%; and large accounts, 2.6% compared to 3.8%.

In general, pricing for the commercial lines surveyed continued to rise moderately, with a few lines – business interruption, umbrella, commercial property and workers’ compensation – declining slightly more than some other lines and showing signs of flattening in 2013 Q3, CIAB reports.

“However, brokers’ experiences on those lines varied across the country depending on location and circumstances,” the council statement adds.

Location was also an issue with regard to wind/hail deductibles. Surveyed brokers reported wind/hail deductibles for property were being added in some regions of the country, particularly in the Southeast and Midwest, which experienced some severe weather during the summer.

“A few brokers said carriers were hesitant to write business with large roof exposures. A broker in the Southwest reported price hikes of as much as 20% for flood insurance,” CIAB notes.

Brokers across the U.S. said that carriers’ appetite for new business was healthy and aggressive, the council states. “Some carriers were more willing to negotiate rate increases on good existing business, but terms and conditions continued to be tight. And any account with bad experience still met with close scrutiny.”