MarketScout: P&C Rates Rise for Second Straight Month in December
NU Online News Service, Jan. 5, 12:13 p.m. EST
The year 2011 came to a close with firm evidence that the soft market has ended, according to the latest figures released by the electronic insurance exchange MarketScout.
Average property and casualty rates rose 1 percent, according the Dallas-based company.
This marks the second consecutive month of increase in the MarketScout barometer.
According to MarketScout, the answer is yes. Average P&C rates rose in both November and December, though the increase in December was a fairly modest one percent. We're a long way from hard market territory.
The question becomes, is this sustainable? The government announced today that private employers added 212,000 jobs last month and almost two million jobs last year (job cuts in the public sector reduced the number of net new jobs created to 1.6 million.) With the economy at last starting to show some legs, will insurers let rising payrolls and sales boost their premiums, or will they continue to dip their toes in the rate-increase waters?
Much of the answer depends on the 2012 storm season, which, if 2011 is any guide, starts much earlier than June now (think tornadoes.) Another year like last year will make underwriting discipline and rate strengthening the talk of the town.
Make sure your seatbelts are fastened and your seats and trays are in the upright position. It's going to be an interesting year.
What do you expect to see in the markets in 2012? Leave your predictions (which I will be able to conveniently haul out next December) in the comments.