• Insurers are maintaining underwriting discipline and resisting pressure to underprice accounts because of the influence of catastrophe models, low interest rates, increased accountability from ratings agencies and other factors.

• Low catastrophe losses have helped insurers report very strong results for the first quarter of 2013, with a 43 percent increase in net income to $24.5 billion.

• Frame habitational market still struggles with prices spiking and insurers exiting market.

• Hailstorm claims were up 84 percent in 2012, so insurers are imposing percentage deductibles for Midwest wind and hail coverage.

“A combination of trends appears to be leading to flatter insurance cycles and we are cautioning buyers to temper expectations about lower prices,” said David Pagoumian (pictured), CEO/President of NAPCO. “Rather than responding to market spikes and dips, insurers are considering the individual merits of each account. Broad downward pressure on rates is inconsistent with our experience.”

This smoothing out of market cycles is traceable to a few trends, which the report highlights in detail. Catastrophe models are getting better a predicting large losses, so rating agencies have pressured insurers to avoid discounting too steeply. At the same time, insurers cannot raise prices when major incidents—like Hurricane Sandy—fail to impact the well-capitalized market.