A relatively low catastrophe year and ample capacity has resulted in competitive pricing for US personal lines business written in December 2015. The composite rate was down 1 percent.
Richard Kerr, CEO of MarketScout profiled the 2015 year, “The lack of catastrophes and the additional market capacity will probably continue to result in aggressive pricing. The non-admitted markets are more directly impacted by significant wind or quake events. The dearth of these catastrophes has resulted in some non-admitted insurers dropping their guard. These insurers, along with some of the thinly capitalized upstart companies in Florida, will suffer tremendously when a significant hurricane or quake occurs. The question isn’t if it will come, it’s simply when. With Mother Nature, that could be 30 years or 30 days. For now, reinsurers allow both admitted and non-admitted personal lines insurers to roll the dice knowing they have protection when The Big One comes.”
Rates for homeowners’ policies covering risks with coverage A exposures under $1,000, 0000 actually went up from down 1 percent in November to flat in December 2015. Insurers covering homes over $1,000,000 decreased rates from minus 1 percent in November to minus 2 percent in December 2015.
Automobile and personal articles remained unchanged at flat and minus 1 percent.
The National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout's analysis of market conditions. These surveys help to further corroborate MarketScout's actual findings, mathematically driven by new and renewal placements across the United States.
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