Premium increases continue to slow down in US commercial P&C market
Premium increase moderation in the US commercial P&C market continued in the first quarter of 2024, according to the Council of Insurance Agents & Brokers (CIAB). All lines recorded premium increases flat or down from the previous quarter, with the single exception of commercial auto.
According to the CIAB’s Commercial Property/Casualty Market Report for Q1 2024, premiums across all account sizes increased by 7.7%, slightly up from the previous quarter’s 7.0%. It was the 26th consecutive quarter of increases. The biggest decreases were seen in workers compensation (-1.8%) and D&O (0.8%) premiums.
Commercial property premiums increased by an average of 10.1%, lower than 11.8% in Q4 2023, but difficulties with that line continued, according to respondents to the CIAB’s survey. One respondent described placing the line in general as “almost impossible”, with other responses highlighting stricter underwriting, the amount of detail required in submissions, and the push for property value increases as the main challenges.
Commercial auto premiums increased by an average of 9.8%, compared to 7.3% last quarter. “Experts suggest high vehicle repair costs due to inflation and supply chain woes, the increase in nuclear verdicts for auto accidents and a shortage of experienced truck drivers have all contributed to issues with the line. the P&C survey data also shows a steady increase in the number of respondents reporting an increase in commercial auto claims, which would contribute to premium pricing as well,” said the CIAB.
The Council said D&O decreases seem to be due to an excess of capacity – survey data shows the number of respondents reporting an increase in capacity for the line doubled between Q4 2023 and Q1 2024 – meeting a lack of demand.
According to the survey, medium accounts increased the most for the fourth consecutive quarter, at 8.5%, while both small and large account premiums rose by 7.3%.
