Business Insurance
Mark Hofmann
January 8, 2013
Commercial property/casualty insurance rates continued to climb in December, increasing an average 5% over those of the same month a year earlier, Dallas-based electronic insurance exchange MarketScout reported Monday.
Rates for commercial automobile increased the most at 6%, followed by commercial property and general liability at 5% each. Surety rates increased the least at 1%.
The manufacturing, service and transportation industries sustained the largest increases at 6%, while public entity and energy industry accounts reported the smallest increases at 4%.
Best Maintains Negative Outlook
MarketScout Report
Showing posts with label Property Insurance. Show all posts
Showing posts with label Property Insurance. Show all posts
Tuesday, January 8, 2013
Friday, May 11, 2012
Commercial Property/Casualty Pricing Toughened in Q1 2012
The time has come to Manage Risk and
Position One's Business for a
Changing Insurance Environment.
Underwriters re-learned the "No" Word
The Council of Insurance Agents & Brokers
WASHINGTON, D.C. – May 8, 2012 – Prices hardened and underwriting toughened in the commercial property/casualty market in the first quarter of the year, according to The Council of Insurance Agents & Brokers’ quarterly Commercial P/C Market Index Survey. On average, small, medium and large account pricing rose 4.4 percent compared with 2.7 percent last quarter. Large account pricing realized the biggest increase quarter-to-quarter. Prices also rose across most lines surveyed.
“We’ve been cautious up to now about declaring a market turn, but I think it’s reasonable to say that the market has made a hard turn after two quarters of price increases and tighter underwriting,” said Ken A. Crerar, president/CEO of The Council. “It’s difficult to predict length and severity, but the market has turned.”
A broker from the Midwest summed up the past quarter market environment: “Insurers sought rate [price] increases of five percent-plus across the board. For those accounts with losses, higher rate [price] increases were sought. For those risks, other markets were more selective in considering than in prior years.” A broker from the Northwest said, “Most carriers were asking for a five-to-eight percent increase depending on the line of business. DIC, earthquake and flood all increased about 25 percent or coverage is hard to find.”
The rising cost of natural disasters clearly had an impact on insurer pricing, particularly for coastal properties, as insurers embraced new modeling programs such as RMS11.
“We manage coastal property and pricing increased due to RMS 11, substantially on some accounts,” a broker form the Southeast said. Brokers in the Northeast experienced much the same. “RMS 11 treaty reinsurance price increased and the general market for companies with CAT-prone properties made carriers dictate structure, terms and premium increases.”
Workers’ compensation toughened as carriers raised prices or rejected the business. Sixty-eight percent of brokers responding said workers’ compensation prices increased 1 percent to 10 percent in the first quarter of the year. A broker in the Southeast commented, “Workers’ compensation was up with any kind of losses or up just a little even with no losses. Certain classes were not being accepted like they were.” A broker in the Northwest said, “Workers’ compensation increased in pricing or many carriers are non-renewing accounts.”
In an indication that the economy may be improving, 59 percent of respondents said demand for insurance was up in the first quarter, compared to 53 percent who said demand did not improve in the previous quarter. Survey Results and Charts
Monday, April 30, 2012
Property/Casualty Insurance Buyers Facing Tougher Pricing
Press Release
4/30/12
KANSAS CITY, Mo., April 30, 2012 /PRNewswire via COMTEX/ -- Chief financial officers, risk managers, and other commercial insurance decision makers face a tougher pricing environment in the coming months in the property and casualty insurance market, according to the latest Lockton Market Update.
Prices for many risks are flat, and commercial insurance buyers face tougher underwriting and rising prices in many markets. The new package of market updates from insurance broker Lockton outlines the market dynamics and approaches to mitigate insurance cost increases.
Casualty Insurance Market "Although casualty insurance capacity is still strong, its impact on pricing continues to fade," Lockton casualty experts Jesse Olsen and Stacy Seaburg say. "Instead, carriers are focused on return on capital." Many insurance carriers are attempting to raise prices and stiffen underwriting guidelines to increase returns to stakeholders, meaning tougher renewal conversations for insurance buyers.
Commercial Property Insurance Market Lockton's Jim Rubel writes that the commercial property market is not yet hard, where capacity is not available at any price. "However, it has become a very difficult market for buyers of property-catastrophe insurance--a market where capacity is available, but only at a price."
Rubel says insurance buyers who begin the renewal process early and provide underwriters with plenty of detailed information will be in a position to minimize the potential for significant price increases. Lockton Full Report
4/30/12
KANSAS CITY, Mo., April 30, 2012 /PRNewswire via COMTEX/ -- Chief financial officers, risk managers, and other commercial insurance decision makers face a tougher pricing environment in the coming months in the property and casualty insurance market, according to the latest Lockton Market Update.
Prices for many risks are flat, and commercial insurance buyers face tougher underwriting and rising prices in many markets. The new package of market updates from insurance broker Lockton outlines the market dynamics and approaches to mitigate insurance cost increases.
Casualty Insurance Market "Although casualty insurance capacity is still strong, its impact on pricing continues to fade," Lockton casualty experts Jesse Olsen and Stacy Seaburg say. "Instead, carriers are focused on return on capital." Many insurance carriers are attempting to raise prices and stiffen underwriting guidelines to increase returns to stakeholders, meaning tougher renewal conversations for insurance buyers.
Commercial Property Insurance Market Lockton's Jim Rubel writes that the commercial property market is not yet hard, where capacity is not available at any price. "However, it has become a very difficult market for buyers of property-catastrophe insurance--a market where capacity is available, but only at a price."
Rubel says insurance buyers who begin the renewal process early and provide underwriters with plenty of detailed information will be in a position to minimize the potential for significant price increases. Lockton Full Report
Friday, April 6, 2012
Commercial Property/Casualty Rates Continue Moving Up
Business Insurance
By Mark Hofmann
April 5, 2012
Commercial property/casualty insurance rates increased an average of 3% in March compared with a year earlier, MarketScout reported Thursday.
According to the Dallas-based electronic insurance exchange, workers compensation and commercial property experienced the greatest rate increases at 4% each.
No line of insurance tracked by MarketScout reported a rate decrease, although rates for fiduciary and crime insurance remained flat compared with those of a year earlier.
Among industry classes, manufacturing, contracting, transportation and energy each experienced 3% rate increases; service and habitational accounts registered 2% increases; and public entities experienced the smallest increase at 1%.
“Our results continue to show a slow and steady path towards rate increases in all segments,” whether by line of coverage, industry group or account size, MarketScout CEO Richard Kerr said in a statement.
Vigilant Transport: Another factor driving rate increases is the vulnerability to rising interest rates.
"Interest rate increases could result in a capital loss of between $40 billion and $60 billion on the industry's $874 billion bond portfolio in 2012, or 7% to 11% of its equity capital base,"
By Mark Hofmann
April 5, 2012
Commercial property/casualty insurance rates increased an average of 3% in March compared with a year earlier, MarketScout reported Thursday.
According to the Dallas-based electronic insurance exchange, workers compensation and commercial property experienced the greatest rate increases at 4% each.
No line of insurance tracked by MarketScout reported a rate decrease, although rates for fiduciary and crime insurance remained flat compared with those of a year earlier.
Among industry classes, manufacturing, contracting, transportation and energy each experienced 3% rate increases; service and habitational accounts registered 2% increases; and public entities experienced the smallest increase at 1%.
“Our results continue to show a slow and steady path towards rate increases in all segments,” whether by line of coverage, industry group or account size, MarketScout CEO Richard Kerr said in a statement.
Vigilant Transport: Another factor driving rate increases is the vulnerability to rising interest rates.
"Interest rate increases could result in a capital loss of between $40 billion and $60 billion on the industry's $874 billion bond portfolio in 2012, or 7% to 11% of its equity capital base,"
Wednesday, January 25, 2012
Commercial Insurance Rates Increase Again in Q4 2011
Time to Get One's Risk Management Groove On!!
as
The Soft Market Party is Serving Soggy Pretzels
Business Insurance
By: Mark Hofmann
1/24/2012
Commercial property/casualty rates increased an average of 2.8% during the fourth quarter of 2011 compared with the same period a year earlier, the Council of Insurance Agents & Brokers said in its quarterly survey released Tuesday.
“It's clear from the data that the market continued its upward momentum in the fourth quarter,” Ken A. Crerar, president and CEO of the Washington-based council, said in a statement. “Capacity was still strong, but prices rose in the face of declining underwriting profitability, dwindling reserves and huge catastrophic losses.”
Workers comp leads increases
The council's “Commercial P/C Market Index Survey” found that workers compensation experienced the largest rate increase at 7.5%. Commercial property ranked second with an average increase of 5.7%.Large accounts reported the smallest increases, with an average increase of 1.8%. Medium-size accounts reported a 3.5% increase, and small accounts reported a 3.1% increase.
By contrast, commercial property/casualty insurance rates dropped an average of 5.4% in the fourth quarter of 2010 compared with a year earlier, the council reported early last year.
Speaking of Workers' Compensation...
Signs point to more unprofitable years ahead for the workers compensation insurance industry, according to a Standard & Poor's Corp. report released Monday. S&P also called the workers comp industry's track record of underwriting results “dismal,” with only three years of underwriting profits being earned during the past two decades.
Monday, October 3, 2011
Property/Casualty Insurance Companies' Net Income Tanks 67% in First half of 2011
Business Insurance
By Mark Hoffman
September 30, 2011
The U.S. property/casualty insurance industry’s net income fell 67% to $6.9 billion during the first six months of this year compared with the same period a year earlier, according to a report to be released by A.M. Best Co. on Monday.
The industry’s combined ratio deteriorated more than 9 percentage points to 109.6%, according to the report. Oldwick, N.J.-based Best noted that the industry sustained $27 Billion in catastrophe losses during the first half of this year, which added 12.8 percentage points to the combined ratio.
Investment income edged up about 4% to $28.7 billion during the first six months of the year compared with the same period last year. Policyholder surplus stayed virtually flat at $556.2 billion during the first six months of this year compared with $554.3 billion at the end of 2010.
Because of a number of factors, “the industry’s performance measures are likely to remain under pressure for the remainder of 2011,” said Best. These include “continued expectations for weak underwriting results due to elevated catastrophe-related losses through the third quarter,” “challenging market conditions” in commercial lines, a sluggish economy and relatively low investment yields, as well as volatility in the investment markets, said Best.
Next Up...Preparing for a Hardening Market Cycle
By Mark Hoffman
September 30, 2011
The U.S. property/casualty insurance industry’s net income fell 67% to $6.9 billion during the first six months of this year compared with the same period a year earlier, according to a report to be released by A.M. Best Co. on Monday.
The industry’s combined ratio deteriorated more than 9 percentage points to 109.6%, according to the report. Oldwick, N.J.-based Best noted that the industry sustained $27 Billion in catastrophe losses during the first half of this year, which added 12.8 percentage points to the combined ratio.
Investment income edged up about 4% to $28.7 billion during the first six months of the year compared with the same period last year. Policyholder surplus stayed virtually flat at $556.2 billion during the first six months of this year compared with $554.3 billion at the end of 2010.
Because of a number of factors, “the industry’s performance measures are likely to remain under pressure for the remainder of 2011,” said Best. These include “continued expectations for weak underwriting results due to elevated catastrophe-related losses through the third quarter,” “challenging market conditions” in commercial lines, a sluggish economy and relatively low investment yields, as well as volatility in the investment markets, said Best.
ShieldsTransit
109.6% combined ratio does not lend itself for a continuation of "soft market pricing." 87% of the chief financial officers said they believed the casualty market was still soft or at the bottom of the cycle in June, 80% of them said it was within two years of hardening, according to a statement.Next Up...Preparing for a Hardening Market Cycle
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