Stable commercial rates expected, despite Helene

Commercial property/casualty insurance rates will likely be stable for the rest of this year, with declines in several market sectors, though primary and excess liability prices continue to rise, according to brokerage Hub International Ltd.’s recently published third-quarter rate report.

Commercial property rates, which varied between 10% decreases and 5% increases in the third quarter, will likely remain stable despite losses from Hurricane Helene, said Mike Chapman, national director of commercial markets and president of Hub’s south and central regions, in an interview discussing the report.

Modeling firm Karen Clark & Co. said Wednesday that insured losses from the storm will likely be about $6.4 billion, which does not include coverage with the National Flood Insurance Program. The storm was unusual because much of the damage was inland in parts of Georgia and North Carolina.

A significant amount of damage caused by Helene will be uninsured, Mr. Chapman said.

“People in Asheville, people in a lot of Georgia, they don’t carry NFIP,” he said.

Commercial insurers’ losses from Helene will likely be below their reinsurance attachment points, and unless there is another major storm during the 2024 season, the event should not significantly disrupt the market, Mr. Chapman said.

Property insurers increased rates and property valuations substantially between 2021 and 2023, he noted.

General liability and excess liability rates were flat to up 10% in the third quarter, according to Hub, which focuses on mid-sized businesses.

Since courts fully opened after the COVID-19 pandemic, jury awards in several states have escalated, Mr. Chapman said.

“All the cases that were being settled over Zoom and arbitration are going to jury trials again,” he said. “Social inflation and nuclear verdicts, they’re back.”

Commercial auto rates, which have been rising for years, were up between 5% and 10% in the third quarter, the report said.

“Insurers can’t get the rates up fast enough to offset the cost of claims,” Mr. Chapman said.

In other lines, directors and officers liability insurance rates ranged from 10% decreases to 5% increases, cyber liability ranged from 10% down to flat and workers compensation rates ranged from 3% down to 3% up.