Rates
-
As the industry gathers in San Diego, these are the key discussion points.
-
From here on out, insurers will likely have to rely on the strength of their individual stories.
-
Prices for programs that renewed in both Q1 2023 and Q1 2024 decreased 15%.
-
The carrier is also targeting E&S growth in property brokerage and global specialty.
-
Concern about vague cat modeling language was a theme at a Tuesday workshop.
-
The casualty segment posted $18mn of favorable reserve development across multiple accident years.
-
Property rate increases decelerated to 3% in the quarter.
-
A litany of underwriting and quoting constraints has made it much harder to write business.
-
For workers’ comp, premium renewal rates were down -0.88% compared to -0.64% for Q4.
-
Compared to March, more sources shared accounts of rate declines and oversubscription.
-
Ten states joined in the original suit.
-
Social inflation is driving “cat-type” losses, with an increase in $50mn-plus verdicts.
-
Retentions and coverage could be affected by future adverse claims trends.
-
Given ample capacity and no sharp increase in demand, a market sea change is not expected, barring an unforeseen economic event.
-
WTW said adverse development “is evident” in auto liability lines from 2015 to present.
-
Premium inflation holds, as loss-cost inflation trends continue to moderate.
-
This continues a consecutive quarterly gain of over 6%.
-
Personal lines rate filings are rising, even as some inflation drivers slow.
-
Commercial property rates for February rose 10.77%, up from 10.30% in January.
-
Premiums rose an average of 7% across all lines, down from Q3.
-
Carriers expressed confidence on the line’s ability to withstand medical inflation.
-
Otis could be a $2bn-$3bn loss, but more information is expected before June renewals.
-
CSAA writes over 70% of its business in the Golden State.
-
This follows a record-breaking $63bn of premium and 24.1% growth for 2022.
-
The carrier expects to "get smaller in New Jersey" due to lack of rate adequacy.
-
The broker said softening was emerging in some lines, but cat risks remain challenging.
-
The index’s 2023 peak was Q2, when rates increased 19%.
-
The growth positives of last year are showing signs of fading.
-
Falling rates in finpro and increased competition in property drove the trend.
-
Commercial property pricing rose 11%, while personal auto grew 21.9%.
-
Broker earnings reflect shifting tailwinds, with margins revealing the real winners.
-
The drivers are not surprising, but the extent of development is, execs said.
-
Property rate increases decelerated to 6% in Q4, compared to 7% in Q3 and 10% in Q2 2023.
-
Rates are generally cheaper than the admitted market.
-
The average 2023 premium renewal rate change for commercial property was significantly higher than 2022 across all months.
-
The broker’s Q4 programs reinsurance change led to a one-time $19mn charge that will allow it to reduce its PML exposure.
-
Organic growth will slow from historically elevated levels and the increased cost of debt will take its toll.
-
The brokerage reported that polled carriers, however, have pointed to ransomware activity reverting to 2019 levels to argue current pricing is unsustainable.
-
A “return to minimal valuation increases can be expected soon”, the broker wrote in its 2024 P&C market outlook report.
-
European rates on line increased by 7.60%, while in the US prices were up 5.25%.
-
2024 is likely to be another challenging year for the industry, and commercial in particular, though improvement in personal lines may soften the blow.
-
The broker said over-placement on some deals was a positive sign for brokers, though reinsurance capacity is still very tight in some areas.
-
Reinsurers are making some adjustments to secure target signings but appetite to grow is finely balanced.
-
Carriers aren’t calling off their retreat from the market until tangible, actionable regulations emerge from commissioner Lara’s camp, sources told this publication.
-
The need to recognize adverse development in the back book is the most plausible culprit for market behavior, and an escalation of rhetoric.
-
Cooling CPI metrics and improving loss ratios indicate a positive shift for the personal auto industry, but results are not yet back to where they need to be.
-
The 2024 budget increases net operating expenses to $40.2mn, up from $35.2mn in the 2023 budget.
-
Anticipations of a tug-of-war around a ‘flat to slightly up’ pricing renewal have indeed come to fruition.
-
Personal auto carriers risk falling behind in the battle between loss costs and approved rate declines, while homeowners carriers’ double-digit filings might not be enough to keep up.
-
The executive expects the carrier to write “a bit more” property cat business in the coming renewals as it manages the exposure of its entire book.
-
Of the major commercial lines of business tracked by Ivans, all experienced increases in premium renewal rate changes except commercial property and general liability.
-
The state is already experiencing affordability challenges, and regulators are concerned that an availability crisis is brewing.
-
Insurance Insider US’s morning summary of the key stories to get you up to speed fast.
-
Issues over reinsurance pricing and capacity continued to plague commercial property.
-
Profits are expected to widen thanks to improved rates and higher average attachment points.
-
Insurers should reserve as conservatively as possible, maximize their product set, and decide if they are buyers or sellers.
-
Insurance Insider US’s morning summary of the key stories to get you up to speed fast.
-
Meanwhile, the company’s October cat losses came in below the reporting threshold of $150mn, compared eith $317mn of cat losses in September and nearly $1.2bn for Q3.
-
Slowing loss cost trends may signal relief ahead, but only if carriers remain vigilant on rate action until we are past the peak.
-
The ratings agency said the change reflected its expectation that the carrier would post improving underwriting results in the next two years.
-
Broker and commercial carrier trends separate as inflation slows but rates stay elevated.
-
Cedants and brokers are navigating the complexities of varying risk appetites signaled by reinsurers, who are willing to provide more capacity for cat treaty but only at certain layers as they maintain discipline.
-
Compared to September, all major commercial lines of business tracked by Ivans experienced increases in premium renewal rate changes.
-
The decline marked the sixth consecutive quarter of double-digit pricing declines.
-
TWIA has raised its net operating expenses to $40.2mn.
-
Commercial insurance pricing remained flat, increasing by 3% globally over the period, the same as the prior quarter.
-
Inside P&C’s morning summary of the key stories to get you up to speed fast.
-
CNA continued to push for rate in lines of business affected by social inflation in Q3, as CEO Dino Robusto said the carrier was “pleased that there is an increasing awareness for this need in the marketplace”.
-
Chubb NA property soared 23% in Q3 with rates up 16.6% and exposure change of 5.5%, as casualty pricing rose 11%, with rates up 8.7% and exposure up 2%.
-
The revised status follows the recent announcement that R&Q Insurance Holdings has agreed a sale of its Accredited program.
-
“As we look to January 1, the market appears to be more orderly than last year, but we expect underwriting discipline to continue,” CEO John Doyle told analysts.
-
Data shows Texas developments parallel some of the trends in other troubled states, but it is heading in from a stronger position.
-
In 2022, Texas ranked third in incurred losses behind Florida and California, clocking in at $53bn, according to data from the Insurance Council of Texas.
-
Commercial property rates in Hawaii, which sustained a major wildfire event in August, went up to 5.02% that month from 1.65% in July, but remained lower than the average even after the increase.
-
Insurance regulators in California and other states signed off much-needed personal lines rate hikes in September.
-
Competing forces of loss cost inflation and mixed rate action yield uneven trajectories for the largest commercial lines.
-
The executive also recommitted Aon to its mission around creating net new markets – including growing IP – in the wake of the Vesttoo issues.
-
Nearly all lines showed “moderate to significant” price increases, except workers' compensation, D&O liability and cyber.
-
Inside P&C’s news team runs you through the key highlights of the week.
-
The carrier’s E&S property book is “up 29%, with 25 points of rate”, said the executive.
-
Floridians will bear the brunt of Idalia's losses as a retention event, but reinsurers will reap the benefits of pricing.
-
In contrast, cyber pricing continued slowing down as Q2 rates increased 3.6%, compared with 8.4% in Q1 and 15% in Q4 as the space was hit by increased competition.
-
Board members voted five to four in favor of rate increases but fell short of the two-thirds majority required.
-
In California, the carrier filed for a 35% increase this quarter after implementing a 6.9% rate hike in April.
-
It marked the highest YoY growth this year, followed by 46% growth in January and 40% in June.
-
At the same time, insurers are assessing the level needed to address loss cost trends.
-
The carrier is set to achieve 20% rate increases in auto this year, with the same rate increase likely to be needed in 2024 to achieve its 2025 targets.
-
Chubb NA property rates climbed 22% in the second quarter, driven by higher cat losses, inflation and reinsurance costs.
-
CEO Adam Kembrooke said some markets would struggle to maintain the results they’ve posted historically, after the point of pricing equilibrium in the cyber class.
-
This year’s rate adequacy analysis showed that Twia’s rates are inadequate by 20% for residential coverage and 22% for commercial.
-
Its long-term issue credit ratings was upgraded to “aa-“ (superior). The changes were made in recognition of the parent company’s improved financials.
-
Personal lines underperform predictions, while brokers and InsurTechs are a positive surprise (for now).
-
Inside P&C’s morning summary of the key stories to get you up to speed fast.
-
Loss-free accounts were generally up 20%-50% at renewal, the reinsurance broker said.
-
Rates continue to rise through June, with the homeowners’ weighted average rate change coming in at 8% for the month, while auto rates increased by a significant 11.3%.
-
Reinsurers began relaxing limits on US property exclusions, but the lack of new start-ups points towards stability amid a more orderly market, the broker forecast.
-
Inside P&C’s news team runs you through the key highlights of the week.
-
Despite reinsurers’ concerns over social inflation and loss trends, capacity remains abundant in both quota share and XoL deals, sources say.
-
California Insurance Commissioner Ricardo Lara was speaking about climate change's impact on insurance pricing at the Bermuda Climate Summit.
-
The hard reinsurance market and elevated cat losses continued to drive rate increases.
-
The broker said increased reinsurance costs had not been passed onto customers.
-
Inside P&C’s morning summary of the key stories to get you up to speed fast.
-
For the business line, this is the first month-on-month slowdown since October 2022.
-
The broker said clients could save money, increase limits and buy extra coverage.
-
Considering recent reforms, Citizens’ rates, on average, are still 58.6% below actuarially sound levels, but the inadequacy would have been 88.3% without them.
-
H1 2023 renewal rates for wind and fire-exposed properties in Florida, Louisiana and Texas increased more than 300% in some cases, exceeding the broker’s January forecast.
-
Inside P&C’s morning summary of the key stories to get you up to speed fast.
-
Even clean accounts in the admitted space are seeing rate increases of 15% year on year, while loss-hit accounts in Florida were slapped with a 100% rate increase for June 1.
-
Continuing rises in loss frequency and severity plus a difficult regulatory framework make the situation in California highly challenging for carriers.
-
Inside P&C’s morning summary of the key stories to get you up to speed fast.
-
Early private deals have provided far more stability in this year’s renewal than last.
-
Inside P&C’s morning summary of the key stories to get you up to speed fast.
-
The average increase in commercial property premiums was 20.4% during the quarter due to inflation, natural catastrophes and persisting supply chain issues.
-
The executive said IGI is seeing similar trends in treaty rate renewals during the second quarter of the year.
-
Strong results reflect tailwinds in the E&S space, but social inflation will be a trend to watch.
-
Used car and truck prices declined 6.6% year on year in April, while new vehicle prices rose 5.4% in the same period.
-
Inside P&C’s news team runs you through the key highlights of the week.
-
Inside P&C’s morning summary of the key stories to get you up to speed fast.
-
Premium renewal rate increases for most commercial lines of business tracked by Ivans pricing data accelerated in April month on month, except workers' compensation.
-
Client fatigue has transitioned to frustration as buyers face a hard commercial property market and inconsistency of coverage.
-
Inside P&C’s morning summary of the key stories to get you up to speed fast.
-
Personal lines rates ticked up in April compared to the prior month as insurers try to stay ahead of rising loss costs.
-
Though strong growth continues, the future is less clear as driving forces potentially run out of steam.
-
Inside P&C’s news team runs you through the key highlights of the week.
-
Inside P&C’s morning summary of the key stories to get you up to speed fast.
-
Most lines continued to record price increases, with global rates being propelled largely by rising rates in property insurance.
-
Chubb earnings reveal strategic expansion in Asia and pricing outpacing exposure.
-
Pricing in NA commercial P&C increased 11.2%, including changes in rate and exposure of 6.4% and 4.5% respectively, while loss cost trends rose 6.7%.
-
An uptick in financial markets activity could increase demand, but there is also significant risk which currently isn’t priced into the market.
-
D&O (Inside P&C Daily lead story): There is hope that public D&O rates could stabilize in the second half of the year following a tough end to 2022 and an ongoing slump in Q1. Significant discounts granted in 2022 are unlikely to be repeated, and there are ongoing concerns around both economic and social inflation, sources said. In the meantime, rates remain pressured from ample capacity and muted demand as established providers and incumbents drawn to the hard market of past years compete for relatively stagnant demand. The collapse of SVB, while a shock, wasn’t the inflection point for D&O that some might have expected.
-
One question in the community is whether nuclear verdicts this year will spark a re-acceleration of rates, especially in the lead excess layers.
-
Inside P&C’s morning summary of the key stories to get you up to speed fast.
-
Management was speaking after RLI reported a Q1 combined ratio of 77.9% for Q1 2023, unchanged compared to the prior-year quarter, as top line growth accelerated sequentially to 15.6%.
-
Primary insurance rate increases were 10% for property in Q1 compared to 7% in Q4.
-
Mark Cloutier set out Aspen’s plans for top-line 2023 growth in the range of 10%, and a continued strategy of pursuing rate rather than exposure growth in property cat.
-
This comes as the all-items consumer price index showed only a 5% gain.
-
The private broker said replacement cost values in the homeowners' sector will also go up this year to offset increased construction costs and inflation.
-
High-impact rate filings in California have driven increases nationwide.
-
The recommendations await approval from the Florida Office of Insurance Regulation.
-
WTW said driver shortages continue to force contractors to use younger, often less experienced drivers, potentially putting upward pressure on losses.
-
Inside P&C’s news team runs you through the key highlights of the week.
-
The company is “not seeing any meaningful economic slowdown” within its data.
-
Meanwhile, commercial auto rates decelerated to 5.64% from 5.84% last month as umbrella slowed down to 4.98% from 5.59%.
-
The all-items CPI increase was the smallest 12-month increase since December 2021.
-
The rise marked a deceleration from the increase in Q3, when carriers reported a 5.2% climb, according to WTW figures.
-
The push for pricing will continue to be strong as at 1.1, but some sources suggest that the upcoming mid-year renewals could be more orderly.
-
Intermediaries have highlighted the ‘evolution’ in reinsurance buying as hard market conditions are expected to continue.
-
Rate action for personal auto insurers has been increasing in 2023 to balance rising loss cost trends
-
Carrier and broker sources canvassed by this publication indicate that whatever they imagined pre-January 1 reinsurance renewals, the community is experiencing an even harder market.
-
Respondents attributed this increase to inflation’s effect on property valuations and the cost of goods, as well as to the natural catastrophe losses.
-
The executive’s remarks followed Employers’ Q4 results, where the workers comp specialist’s top line rose 22.4% to $174mn, compared to 24% growth in Q3 2022.
-
Experts at the Plus D&O symposium took a deep dive into the issues and uncertainties affecting the D&O market as rates soften.
-
Pricing, which includes rate plus exposure, was up 6% for both North America and international.
-
Of those, around $309mn were associated with nine events primarily in Texas and California, partially offset by favorable reserve re-estimates for prior events.