Commercial insurance policyholders paid an average premium increase of 7% in the fourth quarter of 2023, down from 8.1% in the prior quarter, according to the Council of Insurance Agents and Brokers latest pricing survey.
Property insurance rates again increased the most, up 11.8%, but at a slower pace than the 17.1% recorded in the third quarter.
In other major lines, umbrella rates rose 7.6%, commercial auto was up 7.3%, and general liability was up 3.8%. Workers compensation rates slipped 1.8% in the fourth quarter, slightly less than the 2% decrease in the third quarter.
Among other lines of coverage, medical malpractice rates rose 1.7%, cyber rates rose 0.7% and directors and officers liability rates rose 0.1%.
By account size, small accounts saw average increases of 6.7%, premiums for medium-sized accounts were up 8.2% and large accounts were up 6.1%.
The fourth quarter marked the 25th consecutive quarter of commercial insurance rates increases, the Council noted in the report.
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Overall commercial property/casualty premiums increased slightly for all account sizes to 7% on average in the fourth quarter 2024, continuing a trend that has now last more than 6 years.
The continued impact of catastrophic events is a major factor driving up costs, along with the increasing cost of capital, financial market volatility and inflation. This is an expense carriers need to pass along to customers.
Typically, insurance premiums for commercial properties are set by multiplying the value of the building and its contents by a value that correlates to level of risk. Most of the time, properties with high risk have higher property insurance rates, while lower risk properties cost less to insure.
Rate level increases often come about because of trends in the industry towards more expensive vehicle repair and medical costs. Repairs and medical costs are almost always on the rise, so overall rate decreases are a very rare occurrence.
In 2022, an estimated 180 million individuals (54.8% of the U.S. population) and 46 million individuals (13.9% of the U.S. population) were covered by group coverage and direct-purchase coverage, respectively.
Property location plays a major role in determining the cost of your policy. If you own a business in an area with a high crime rate or that experiences a higher-than-average number of natural disasters, your premiums will likely be impacted.
After a catastrophe, which may involve billions of dollars in claims, insurers have to increase premiums — a hardening market. But when their investments do well, as they did through most of the 1990s, insurers have more capital and can compete for more customers by offering lower premiums — a softening market.
On average, Insureon customers pay $42 per month, or about $500 annually, for a $1 million general liability insurance policy. Additionally, 29% pay less than $30 per month, and 40% pay between $30 and $60 per month. Customers who need more coverage will likely pay a higher premium.
The standard commercial property insurance deductible is $250. However, other deductible amounts are available and the deductible applies only once per loss.
A $5 million umbrella policy costs around $375 to $525 per year, on average. Every policyholder's umbrella insurance premium will vary based on their personal risk factors, so individuals who own more cars or properties will be more expensive to insure, as will people who are particularly likely to be sued.
In general, small businesses can expect to pay anywhere from 1% to 5% of their annual revenue for business insurance. However, this is just a general guideline, and the actual percentage can vary greatly depending on the factors mentioned above.
Car insurance costs have been on the rise, leaving drivers searching for ways to save on car ownership costs. In fact, according to a report from Bankrate, the average annual premium of full coverage auto insurance rose to $2,543 in 2024 — up 26% from the previous year.
Your particular driver profile, which includes factors like where you live, your age and your driving record, influences what you pay for car insurance. But rising car repair costs and an increase in disaster-related claims are significant reasons why car insurance rates are surging for many drivers.
The firm's Home Insurance Projection Report foresees a 6% rise in annual premiums in 2024. The increase will put the national average at $2,522 at the end of the year. With climate experts expecting a devastating hurricane season, home insurance costs are forecasted to surge even higher in 2025.
Over the next five years (2024‒28), we forecast that total insurance premiums will grow by 7.1% in real terms, well above the global (2.4%), emerging (5.1%) and advanced (1.7%) market averages. At this rate, India will have the fastest growing insurance sector of the G20 countries.
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