Commercial property/casualty insurers rated by Moody's Investors Service Inc. expect commercial property rates to turn negative this year, according to a survey released Tuesday.
The Moody's report, “U.S. P&C Insurance Survey: Inflection Point for Commercial Liability; Property Turns Negative,” also found insurers believe commercial casualty rate increases will continue to decelerate in 2015 compared with those of a year earlier.
Moody's said that its rated insurers expect rate decreases of 0.5% in commercial property in 2015, down from 1% rate increases in 2014 and 4.5% in 2013.
“According to first-quarter earnings calls, several large carriers reported commercial property rate declines between 5% and 7%,” Moody's said. The report added that declines could be even larger by the end of the year if there are no major catastrophes, “given increasing competition for middle-market and large accounts and lower reinsurance rates with expanded terms and conditions.”
Insurers expect to register average rate increases of about 3% for commercial liability policies written this year, a small drop from the 3.5% increases posted in 2014 and the 7% increases a year earlier.
“Insurers have indicated continued appetite for new business, particularly for workers compensation and commercial general liability, and we believe that pricing increases could again fall below insurers' expectations for 2015,” Moody's said.
Average commercial property/casualty insurance prices were flat in April compared with those of the same month a year earlier, Dallas-based electronic insurance exchange MarketScout reported Tuesday.