Up up and away: Commercial insurance rates are on the rise
Industry numbers are coming in for fourth quarter 2012, and there is not much good news for property/casualty insurance customers. According to the Council of Insurance Agents and Brokers’ Commercial P/C Market Index, commercial coverage premiums jumped 5 percent on average during the last three months of the year. The Southeast U.S., including Florida, followed the national trend.
At the same time, Barclay’s Capital Inc. is predicting that property/casualty rates will continue to climb during 2013. The industry is trying to stay ahead of losses from Superstorm Sandy, among other natural disasters.
The council’s data indicate that small businesses sustained the largest increases. Their rates rose 5.5 percent on average, while larger businesses saw rate hikes more than a point lower, at 4.4 percent. Southeastern states reported a slightly different mix: Rates for small businesses stayed the same, while mid-sized and large businesses saw moderate increases.
While Superstorm Sandy brought flood insurance coverage back to the table, the Southeast did not see increases across the board. Brokers and agents reported that 50 percent of their rates stayed the same, while 40 percent increased by less than 10 percent. In the states where Sandy did the most damage, 13 percent of respondents reported flood rate hikes between 10 and 20 percent, and a small number even reported rates going up between 50 and 100 percent.
Construction risk insurance and general liability insurance were more likely to increase in the Southeast. Workers’ compensation rates rose between 10 and 30 percent for almost half of the respondents.
So the coming year will present a few more financial challenges for businesses in Florida and around the country. With health care costs a bit of a mystery, the increase in property/casualty rates is especially challenging. If the economic recovery does not pick up the pace, which budget line will the money come from?
Sources:
Business Insurance, “Commercial insurance prices rose 5% on average in fourth quarter,” Mark A. Hofmann, Feb. 5, 2013 – 10:51am
Business Insurance, “Barclays predicts increasing property/casualty prices,” Mark A. Hofmann, Feb. 5, 2013
Our firm works with businesses that have problems with their property/casualty insurance claims for losses like the ones referred to above. If you’re interested in learning more about our Miami, Florida, practice, please visit the commercial property insurance claims page of our
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