Commercial P&C Insurance Rates Increase 3.75% in 2024

U.S. commercial insurance buyers paid slightly lower premiums last year, as average rate increases fell to 3.75% in 2024 from 4.56% in 2023, according to MarketScout’s Market Barometer.

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The Market Barometer has recorded increasing rates from 2017 to 2024, following a soft market from 2005 to 2011, and a hard market in 2001 to 2004, according to Market Scout’s analysis, which is based on pricing surveys conducted by the Risk & Insurance Education Alliance.

“Commercial insurance rates have been on a roller coaster since 2001,” observed Richard Kerr, CEO of Novatae, parent of MarketScout. “While recent years have seen steady increases, intermediaries must prepare for an eventual market shift. The past seven years of rate increases have positively impacted intermediary earnings due to percentage-based compensation,” he noted.

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A big factor behind the decreasing composite rate is that fewer insured catastrophe events in 2024 led to decelerating property rates in Q4, according to MarketScout. While umbrella/excess liability and commercial auto rates continued to rise in 2024, professional liability rates are stabilizing.

MarketScout P&C Rate Trend 2001-2024

According to the Market Barometer, the size of commercial lines rate increases steadily shrank throughout the year. In the first quarter, the composite rate was up 4.36%, followed by a 3.9% increase in Q2, a 3.8% increase in Q3 and closing out the year with a fourth-quarter-rate composite increase of 2.64%.

By line of coverage, commercial auto rates increased 6.7% in Q4, while umbrella/excess and general liability both increased 3.7%. Commercial property, business interruption and business owners’ policy (BOP) rates each rose 3.3% in the fourth quarter.

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Cyber rates increased 2.7% in the quarter, down sharply from 7.3% rate increases in Q3.

Directors and officers (D&O) liability rates increased 1.3%, while most other lines – including employment practices liability insurance (EPLI), professional liability and fiduciary liability – were up 1% in Q4.

Workers’ compensation rates remained flat in Q4, unchanged from the previous quarter.

By industry, transportation and contracting sectors saw the largest increases in Q4 commercial insurance rates, rising 5.3% and 3.3%, respectively. On the other end of the spectrum, energy accounts and public entities saw the lowest increases in Q4 at 2.3% and 2%, respectively.

View the MarketScout Market Barometers here. &