Commercial property and casualty insurers continue to face a buyer's market, according to the April 2017 Market Update from the Kansas City-based brokerage Lockton Companies.

“Despite low interest rates, ample capital and growth from new entrants are keeping terms and conditions at competitive levels,” the Lockton report says. “Most clients are benefiting from the refined offerings and increased specialization in product offerings from underwriters.”

To remain competitive, underwriting companies are updating their product offerings, zeroing in on niche customers, and looking to tech innovation for future growth.

“The purchase of insurance is being subjected to the same rigor as any other capital expenditures,” the report says. “Recognizing the strategic aspects of insurance, buyers are intently focused on 'how' they buy insurance, looking for the most efficient risk transfer structure.”

Here are two other highlights from the report:

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      • Workers' compensation rates dropped about 2 percent in the latest quarter. For clients that changed carriers at renewal, that drop is 7 percent.
      • Commercial auto insurance claim frequency has increased 9 percent since 2010, while the severity of these claims has increased 10 percent.

A positive note for insurers, brokers and agents: Companies that are in the market to buy high-limit insurance products continue to concentrate on such fundamental issues as risk assessment, fair pricing and appropriate coverage.

In addition to providing analysis specific to property and casualty insurance, Lockton's April 2017 Market Update also examines market conditions for foreign casualty, earthquake, construction, farm, financial service, cyber, real estate and terrorism insurance.

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Elana Ashanti Jefferson

Elana Ashanti Jefferson serves as ALM's PropertyCasualty360 Group Chief Editor. She is a veteran journalist and communications professional. Reach her by sending an e-mail to [email protected].

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