Workers Compensation Rates Up 6% in May

June 5, 2013

Business Insurance

Average U.S. property/casualty insurance rates rose 5% in May, with small and midsize accounts seeing the biggest increases, Dallas-based electronic insurance exchange MarketScout said Wednesday.

Commercial property, general liability and workers compensation lines saw the highest rate hikes last month, each at 6% year-over-year, according to MarketScout’s Market Barometer report. Commercial auto and umbrella/excess lines increased by 5% in May.

Average property/casualty rates for accounts up to $250,000 in premium increased by 5%, while large accounts of up to $1 million increased by 4% in May, MarketScout said. Jumbo accounts of more than $1 million saw rates increase by 3%.

“The commercial P&C market in the U.S. is continuing its steady trend of rate increases," MarketScout CEO Richard Kerr said in a statement. "There is ample capacity but underwriters continue to increase rates as appropriate.”

The trend in higher rates and premiums continued for employers nationwide in May. Although this means higher commissions for brokers, employers everywhere are struggling to pay higher premiums and might be disgruntled with their brokers. Brokers who offer workers compensation premium recovery to their clients and prospects are able to hold onto their current clients and win new business. Offering a value-added service and obtaining significant refunds on current prior policies shows employers that some brokers are willing to go above and beyond to keep their clients and add new accounts to their book of business. Outsourcing this service takes little to no work on the part of the employer or the broker; just refunds for the employer and commissions for the broker!