Insurance premiums for personal lines in the United States saw a significant increase in the second quarter of 2024, according to the latest research from MarketScout, with P&C insurance rates also seeing a mild increase.
The average rate hike in personal lines rose from 4.75% in Q1 to 7.6% in Q2. For the second quarter of 2024, homeowners’ insurance under $1,000,000 in value saw an 8% increase, while those over $1,000,000 in value increased by 9%. Automobile insurance rates went up by 8.7%, and personal articles experienced a 5% rise.
Richard Kerr (pictured above), CEO of Novatae Risk Group, explained the drivers behind these changes. “Homeowners’ insurers are raising rates because the reported exposure is less than the replacement cost, leading to higher claims than expected. The cost of building materials has risen due to inflation, resulting in larger-than-anticipated claim payments,” he said.
Kerr also noted that “auto insurance rates are up because of increased repair costs and higher-than-expected liability claims.”
The composite rate for US property and casualty insurance, on the other hand, also saw a slight increase in the second quarter of 2024, rising from 3.9% in Q1 to 4.36% in Q2.
“Insurers are comfortable with their pricing, and, as a result, there was no significant movement in rates for any coverage or industry group,” Kerr said.
He added that while property rates could be affected by the upcoming hurricane and wildfire season, current conditions remain stable.
MarketScout's findings were corroborated by surveys from the National Alliance for Insurance Education and Research.
Commercial property rates increased by 7%, business interruption by 5%, BOP by 5%, and inland marine by 4.7%. General liability, umbrella/excess, and commercial auto saw increases of 4.7%, 4.7%, and 8% respectively.
Workers’ compensation remained flat at 0%, while professional liability increased by 3.7%, D&O liability by 3.3%, EPLI by 1.7%, fiduciary by 1.3%, crime by 1.3%, and surety by 1%. Cyber liability experienced a 6.7% increase.
By account size, small accounts up to $25,000 saw a 5.7% rise, medium accounts between $25,001 and $250,000 increased by 5.3%, large accounts between $250,001 and $1 million rose by 4.3%, and jumbo accounts over $1 million also went up by 4.3%.
Industry class adjustments included a 4.3% increase for manufacturing, 5% for contracting, 5.7% for service, 6% for habitational, 2% for public entity, 7.3% for transportation, and 2% for energy.
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