Rates for almost all homeowners across the U.S. increased in the first quarter of 2022, regardless of the geographic location or value of the home, according to MarketScout’s Market Barometer.
For homes below $1,000,000 in value, rate increases of 5.3 percent were assessed in the first quarter of 2022, compared to 3.7 percent at the end of 2021.
For the large homes of more than $1,000,000 in value, rates increased 7.0 percent in the first quarter of 2022, compared with an increase of 6.3 percent for the fourth quarter of 2021.
“We expect homeowners rates across the U.S. to continue to increase,” said Richard Kerr, CEO of Dallas-based MarketScout. “What used to be considered relatively benign catastrophe prone areas of the U.S. are now experiencing more and more claims. Further, several major insurers are dramatically cutting back their appetite for tough to place homes. This will impact the availability of coverage and result in significant rate increases or coverage restrictions for many homeowners whose insurer will issue a notice of nonrenewal. In the meantime, rates are going to increase considerably for the tough to place homes, perhaps as much as 35 percent.”
Personal articles rates increased as well, increasing 4.0 percent in the first quarter of 2022, compared to 3.0 percent in the fourth quarter of 2021.
The personal auto rate increase was relatively stable, increasing 4.3 percent in the first quarter of 2022, slightly more than in the fourth quarter of 2021, according to the Market Barometer.
Commercial lines increase
As losses mount, insurance companies and their reinsurers continue to assess rate increases across all lines of coverage and industry groups. The composite rate increase for the first quarter of 2022 was 6.0 percent, which compares to a 5.8 percent composite rate increase for the fourth quarter of 2021.
“Rates in January and February were consistent with what was reflected in the last quarter of 2021,” Kerr commented. “However rates did start to move up even more in March 2022, which could be the beginning of stronger increases for the next several quarters.”
When measured by coverage classification, rate increases were most aggressive in the first quarter of 2022 for cyber, umbrella and D&O at 19.7 percent, 9.7 percent and 8.7 percent, respectively. Commercial property rates were up 7.6 percent in the first quarter of 2022, while commercial auto rates increased 7.3 percent. EPLI rates increased 7.0 percent; business interruption and BOP rates increased 6.3 percent. Professional liability rates were up 5.7 percent; general liability increased 5.0 percent; inland marine, 4.7 percent; fiduciary, 2.3 percent; crime and surety 1.3 percent, and workers’ compensation, 1.0 percent.
By industry classification, transportation and habitational rates increased the most at 10.3 percent and 9.0 percent, respectively. Energy was up 7.0 percent and manufacturing 6.7 percent. Contracting and service classes were each up 6.0 percent, while public entity coverage increased 5.3 percent.
Small and medium size account rates moved up to 5.3 percent and 6.3 percent, respectively. Rate increases for large and jumbo accounts were steady, increasing 6.7 percent in the first quarter of 2022.