Personal lines insurance premiums in the U.S. saw a significant increase in the second quarter of 2024, according to the latest research from MarketScout, with property and casualty insurance rates also increasing slightly.

The average personal lines rate increase increased from 4.75% in the first quarter to 7.6% in the second quarter. In the second quarter of 2024, homeowners insurance under $1 million saw an 8% increase, while those over $1 million increased by 9%. Auto insurance rates rose by 8.7%, and personal items saw a 5% increase.

Richard Kerr (pictured above), chief executive of Novatay Risk Group, explained the drivers behind the changes. “Homeowners insurers are raising their rates because reported exposure is less than replacement cost, leading to higher than expected claims. The cost of building materials has also risen due to inflation, leading to higher than expected claims payouts,” he said.

Kerr also noted that “auto insurance rates have risen due to increased repair costs and higher-than-expected liability claims.”

Property and Casualty Insurance Rates in the United States

On the other hand, the composite rate of property and casualty insurance in the United States also saw a slight increase in the second quarter of 2024, rising from 3.9% in the first quarter to 4.36% in the second quarter.

“Insurers are comfortable with their pricing, and as a result, there has not been a significant movement in pricing for any coverage or industry group,” Kerr said.

He added that while property prices may be affected by the upcoming hurricane and wildfire season, current conditions remain stable.

MarketScout’s findings are confirmed by surveys conducted by the National Alliance for Insurance Education and Research.

Commercial property prices rose 7%, business interruption 5%, BOP 5% and inland marine 4.7%. General liability, umbrella/excess and commercial motor insurance saw increases of 4.7%, 4.7% and 8% respectively.

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Workers’ compensation remained flat at 0%, while professional liability increased 3.7%, directors’ and officers’ liability increased 3.3%, personal accident liability increased 1.7%, fiduciary liability increased 1.3%, crime liability increased 1.3%, and surety liability increased 1%. Cyber ​​liability increased 6.7%.

By account size, small accounts up to $25,000 saw a 5.7% increase, medium accounts between $25,001 and $250,000 increased by 5.3%, large accounts between $250,001 and $1 million increased by 4.3%, and mega accounts over $1 million also increased by 4.3%.

The industry category adjustments included a 4.3% increase for manufacturing, 5% for contracting, 5.7% for services, 6% for housing, 2% for public entities, 7.3% for transportation, and 2% for energy.

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