While 2017 was mostly a buyers' market for both property & casualty commercial insurance and affiliated lines, rates across lines could rise this year due in large part to the industry's estimated $85 billion to $100 billion in total losses from Hurricanes Harvey, Irma and Maria, not to mention wildfires, hail, and tornadoes, according to USI's “2018 Insurance Market Outlook.”
Now that losses and expenses are outpacing premium growth for many insurers and reinsurers, carriers will likely attempt to push through higher pricing in property and affiliated lines, USI practice leaders predict.
“The question is: How long will this persist before capital sitting on the sidelines is deployed to win new business and thereby begin to reduce or stabilize rates?” they write. “And, will the impact of property losses bleed over to casualty and other lines of insurance?”
|Thin profit margins for many carriers
While industry surplus reached an all-time high in mid-2017, exceeding $700 billion, last year's catastrophic events' effect on earnings — coupled with multiple years of annual rate decreases — means thin profit margins for many carriers. As a result, underwriters will seek property rate increases overall and they will employ more selective underwriting for property-related lines, USI practice leaders predict.
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Katie Kuehner-Hebert
Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.
