U.S. Commercial Lines See Moderate Rate Hikes in Q1 2024

Commercial insurance rates in the United States saw a moderate overall increase of 3.9% in the first quarter of 2024, a significant drop from the 5.6% surge in Q4 of 2023, according to a report by MarketScout.

The first quarter of 2024 marked a shift in the commercial insurance landscape, with rates rising at a slower pace compared to the previous quarter. This trend was particularly noticeable in January and February, with rates increasing modestly, but showing a more aggressive uptick in March, stated Richard Kerr, CEO of Novatae Risk Group, parent of MarketScout.

Cyber liability insurance had the largest increase, at 7%, during the quarter, followed by commercial auto insurance, up 6.7%. Property and umbrella/excess liability each posted 6.3% rate increases. On the other end of the spectrum, workers’ compensation rates remained flat during the quarter, the report found.

The data, corroborated by pricing surveys conducted by The National Alliance for Insurance Education and Research, also revealed a breakdown of rate increases by account size. Small accounts up to $25,000 and jumbo accounts over $1 million saw a 4.3% increase. Medium accounts ranging from $25,001 to $250,000 saw a 3.7% increase, while large accounts from $250,001 to $1 million saw a 5% increase.

By industry, the report noted that transportation saw the highest increase at 6.7%, followed by habitational at 5%, and contracting was up 4.3%. Public entity and energy both saw a 2.7% increase.

“Property insurers are nervous about the 2024 catastrophe season,” Kerr commented. “Liability insurers are more calm but economic conditions and incurred but not yet reported  claim estimates may impact rates later in 2024.”

The figures underscore the evolving landscape of commercial insurance rates in the United States, with insurers remaining cautious due to potential catastrophe risks and pending liability developments.

Access the full report from MarketScout here. &