Commercial P&C shows ‘signs of continued market firming’ in Q2 2019 with 7th quarter of price rises, finds CIAB

The Council of Insurance Agents & Brokers (CIAB) has reported signs of continued market firming in Q2 2019 as premium pricing for commercial property and casualty (P&C) showed “moderate increases” in the second quarter of the year.

In its Q2 2019 market index report, based on data from broker members, CIAB found that pricing for medium-sized accounts had risen the most, recording a 6.2 percent increase compared with a 3.5 percent rise in the first quarter of 2019.

The average premium increase across all-sized accounts was 5.2 percent in Q2, up from previous rises of 3.5 percent in Q1 2019 and 2.4 percent in Q4 2018. The report said “medium and large accounts saw the worst of it”, with premium increases of 6.2 percent and 5.6 percent, respectively, which were much bigger than previous rises seen in Q1 2019 or Q4 2018. Small accounts experienced a pricing increase of 3.9 percent, compared to a 3 percent increase in Q1 2019.

All lines of business saw slight-to moderate pricing increases in Q2 2019, with only Workers’ Compensation bucking this trend. CIAB pointed to Commercial Property and Commercial Auto as being “hit the hardest”. Property saw Q2 increases of 8.5 percent up from rises of 5.9 percent in Q1, while auto recorded increases of 8.4 percent in Q2 compared with a similar rise of 8.8 percent in Q1.

The average premium increase across all major lines was 4.6 percent, compared with 3.4 percent in Q1 2019 and 2.1 percent in Q4 2018.

Ken Crerar, CIAB president and CEO, said: “This marked the seventh consecutive quarter of increased premium pricing.

“Additionally, the rate of increase has grown consistently quarter-over-quarter, confirming the growing consensus of market-wide firming. While this trend was specific to a number of lines in late 2017, including Commercial Auto, Commercial Property and Umbrella, every line the council monitors, with the exception of Workers’ Compensation, experienced an increase in premium pricing in Q2 2019.”

Growth in the cyber market was recorded in the report, with nearly three quarters (74 percent) of respondents reporting an increase in demand for cyber insurance. One respondent from a midsize Southeastern firm told CIAB “many of our accounts purchased cyber liability this year whereas they declined in past years”.

However, the “greatest concern to clients” was 'future premium increases' with 78 percent of respondents ranking it as a top-three client concern, which is in line with the uptick in premiums recorded this quarter, CIAB said. Further sources of client anxiety were highlighted as ‘cyber risk’ with 56 percent identifying it as a top three concern, alongside ‘limitations on coverage’ with 40 percent putting it in their top three.

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