General Liability Market Trends: Q4 2013

General Liability: Q4 2013

In North America, countrywide average primary general liability rate increases are at +3.2%, which is down from last quarter’s +4.0% and last December’s +4.9%.

General Liability

Middle Market Accounts National Accounts Global Accounts
10% or more rate increase 4.3% 0.0% 0.0%
7.5% to 9.9% rate increase 4.3% 0.0% 0.0%
5% to 7.4% rate increase 18.5% 15.7% 13.0%
2.5% to 4.9% rate increase 38.0% 45.1% 21.7%
.01% to 2.4% rate increase 15.2% 13.7% 26.1%
Flat 15.2% 23.5% 26.1%
Down -.01% to -4.9% 3.3% 0.0% 8.7%
Down -5% to -9.9% 1.1% 2.0% 4.3%
Down -10% or more 0.0% 0.0% 0.0%
Average Rate Change Dec 2013 3.4% 2.7% 1.4%
Median Rate Change Dec 2013 3.5% 3.2% 1.3%
Average Rate Change Dec 2012 5.4% 4.0% 4.7%
Median Rate Change Dec 2012 5.5% 4.1% 4.5%

General Liability: Q4: 2013Average rates for national accounts dropped to +2.7%/+3.2%  from about +3.8% in September 2013. Average rate increases are down 1.3 percentage points from a year ago and median rate changes are down  .9 percentage points  from a year ago.

Reported rate changes for middle market accounts are running at an average of +3.4%, down from about +4.2% last quarter and +5.4% a year ago.  Median and average rate changes are down about 2 percentage points compared with December 2012.

About 20-25% of respondents reported rate increases of over 5%, with less for large accounts and a bit more for middle market.

Both middle market and large account rates show continuing improvement since the last quarter, with the distributions shifting toward the left. The improvement for large accounts had more flat renewals. The distributions for both segments are more concentrated at the mode than they were two years ago.

Average GL rate increases for construction risks has dropped about 1.1 to 1.4 percentage points from last quarter. Rates for real estate risks have gone up .2 to .7 percentage points. Other industry rates have dropped by about 1 percentage point.

General Liability Average Market Survey Rates

Industry Construction Real Estate Other
Mean 3.3% 4.4% 3.0%
Median 3.4% 4.1% 3.1%


Average rate changes by region fell within in a fairly tight band of +2.5% to +3.7%.  The South, which also reported the lowest rate changes a year ago,  closely followed by the West (which reported the highest average rate changes a year ago),  reported the lowest average rate changes this quarter.

The Atlantic region reported the highest rate changes at +3.7%.

All regions reported lower rate increases than a year ago.

General Liability Market Survey Rate Changes by Region

West average: 2.6% (down from last December’s average of 6.3%)

  • California average: 3.3%
  • Non-California West average: 2.1%

Midwest average: 3.1% (down from last December’s average of 4.7%)

South average: 2.5% (down from last December’s average of 4.1%)

  • Southeast average: 2.7%
  • Southwest average: 2.0%

New York Metro average: 3.6% (down from last December’s average of 4.5%)


  • Atlantic South average: 3.7% (down from last December’s average of 4.9%)
  • Atlantic North average: 3.7% (down from last December’s average of 4.4%)

Exposure Changes

Increasing sales were reported by about 75% (vs. 80% last quarter) of respondents, with about two-thirds reporting flat on number of locations and 30% (vs. 25% last quarter) reporting moderate increases in the number of locations. About 44% of respondents reported moderate to rapidly increasing units sold, with about 55% reporting flat for units sold.

With the introduction of the new ISO CGL in April, clients have been asking for clarification of issues associated with additional insured language and underwriters are asking more questions about related contractual exposures.

Carriers want non-cumulation of limits endorsements on real estate risk policies. Construction associated with residential real estate is becoming an issue for some underwriters.

About Pamela Ferrandino

Pam has been with Willis since 2004 and is Executive Vice President, National Practice Leader for Casualty, Placeme…
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