Lines Rates Decrease

Slightly US Composite Rate Down Slightly to Plus 5% in First Quarter of 2023

Across the US, rates for personal lines coverage moderated slightly.

“The rating environment for personal lines is tracking with Q4 2022, which is to be expected,” says Richard Kerr, CEO of Novatae Risk Group. “The real action in personal lines comes during wind and wildfire season. However, even now, catastrophe exposed high value property owners are struggling to find coverage without experiencing significant rate increases and restriction of terms such as higher deductibles and reduced coverage.”

Homeowners and personal articles insurance on a composite basis were down slightly in the first quarter of 2023.

Automobile insurance rates are increasing at plus 6.3% for Q1 2023 versus plus 5% in Q4 2022.

The National Alliance for Insurance Education and Research conducted pricing surveys used in MarketScout’s analysis of market conditions. These surveys help to further corroborate MarketScout’s actual findings, mathematically driven by new and renewal placements across the United States.

A summary of the first quarter 2023 personal lines rates is set forth below.

Conventional operations in the personal-lines insurance industry are no longer working. Rising loss costs, inflation and growing risks all pose challenges to the insurance industry. However, these challenges may be overcome by targeted underwriting and digitalization.

Insurance is a cyclical business from a performance perspective, but it’s fair to say we’ve never seen a cycle like the one we’re in now. Traditionally, the personal-lines industry operated conventionally with customers buying bundled policies, not modifying their existing coverage and rarely switching carriers.

Now, personal-lines insurers face an uncertain future as they deal with various challenges like inflation, supply chain disruptions, climate change, cyber risk and a rise in digital fraud. These trends push loss costs higher, threatening future profitability.

However, with risk comes opportunity. The pandemic disrupted people’s lives, so consumers expect more from their insurance company. As a result, insurers must deliver innovative products and solutions to meet customer demand and enjoy a competitive advantage in the market.

Industry Challenges

The industry and economy dynamics are challenging the personal-lines insurance industry, making profitability and growth difficult. Some industry challenges carriers face include rising loss costs, economic and social inflation, and evolving risks.