UK Insurance Distribution: Commercial Rate Predictions for 2013

Date: 2015-11

The release of insurers’ 2012 financial results revealed little joy in commercial lines and provoked a return to calls from insurers for much-needed rate movement of between 10-15%. Broker expectations on rates in 2013 reveal doubts that this will be achieved; insurers must put their words into action to persuade them otherwise.

– Explore the differences in rate expectations from brokers, by line, against their experience of the past 12 months.
– Compare the sentiments of brokers on rates with your own pricing strategies for 2013.

– How optimistic are brokers on rate increases across commercial lines in 2013?
– In which lines are brokers most hopeful for rating action and what issues are holding back other markets?

Key Highlights
Insurers interviewed by Verdict Financial across commercial lines in 2012 and early 2013 have reported that rates are heading in the right direction, but not to a sufficient extent to cover a) the growing pain of claims inflation, b) a continually drab investment environment, and c) sustainable conditions given dwindling reserves.

Commercial motor saw the greatest rate increases in 2012, driven by personal injury claims and rising reinsurance costs. This was reflected in broker responses, with the majority experiencing rate growth in 2012 compared to other lines. It is questionable whether the momentum can be maintained to secure sufficient pricing in 2013.”

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