Category Archives: Market Conditions

Swiss Re forecasts growth in insurance markets

This in from Swiss Re Institute’s Global Insurance Review 2017 and Outlook 2018/2019 report:

The cyclical upswing in the global economy is set to continue in 2018 and 2019, supporting insurance premium volume growth.

Global non-life premiums are forecast to grow by at least 3 percent annually in real terms in the next two years and life premiums by 4 percent.

Emerging markets, particularly in Asia, will remain the driver of global non-life and life premium growth, according to Swiss Re.

The Week in a Minute, 11/9/17

The III’s Michael Barry briefs our membership every week on key insurance related stories. Here are some highlights:

The Wall Street Journal reported on Monday, November 6, on how insurance companies are increasingly using private firefighter services to help protect the homes of policyholders in areas prone to wildfires. According to the article, insurers see the service as an opportunity to provide protection beyond what most people get through publicly funded firefighting.

The American Insurance Association named as its new president John Degnan, a former New Jersey attorney general and vice chairman and chief operating officer at Chubb.

Waymo has been testing driverless minivans in Phoenix, Arizona over the past month, Waymo’s CEO announced this week.

 

Commercial insurance rates variable: IVANS Index

Nearly all major commercial insurance lines experienced premium renewal rate increases in October, according to the IVANS Index.

In its analysis, only workers’ compensation remained in negative premium renewal rate territory, IVANS said. Business Owners Policy remains as the line of business with the highest premium renewal rate change, despite continuing its downward trend.

October rate changes include:

  •     Commercial Auto: 3.10%, up from 2.55% at the end of September.
  •     BOP: 3.57%, down from 3.87% the month prior.
  •     General Liability: 1.79%, up from 1.70% at the end of June.
  •     Commercial Property: 2.83%, up from 2.40% the month prior.
  •     Umbrella: 1.34%, down from 1.45% at the end of June.
  •     Workers’ Compensation: -2.24%, down from -1.31% the month prior.

Analyzing more than 120 million data transactions, the IVANS Index measures the premium difference year over year.

The week in a minute, 10/26/17

The III’s Michael Barry briefs our membership every week on key insurance related stories. Here are some highlights:

  • Hurricane Nate caused insured wind-caused damage totaling anywhere from less than $500 million (Risk Management Solutions) to as much as $1 billion (CoreLogic). Nate made landfall as a Category 1 storm on the Louisiana-Mississippi border on the weekend of October 7-8.

 

THE WEEK IN A MINUTE, 10/19/17

The III’s Michael Barry briefs our membership every week on key insurance related stories. Here are some highlights:

The Week in a Minute, 10/13/17

The III’s Michael Barry briefs our membership every week on key insurance related stories. Here are some highlights:

The multiple wildfires raging this week in at least seven northern California counties have caused fatalities and widespread property damage.

Hurricane Nate made landfall as a Category 1 storm on the weekend of October 7-8 and generated storm surge-caused property damage and power outages in Louisiana, Mississippi, and Alabama.

The number of U.S. highway fatalities rose 5.6 percent in 2016 as compared to 2015, according to the National Highway Traffic Safety Administration (NHSTA).

Eye on commercial insurance prices

Despite ample capital and benign claim cost trends, insurers have held the line on trading profitability for volume, while still responding as needed to emerging trends, according to Willis Towers Watson.

Its most recent Commercial Lines Insurance Pricing Survey (CLIPS) shows that commercial insurance prices in the U.S. were nearly flat in the first quarter of 2017.

Price changes reported by carriers averaged less than 1 percent for the sixth consecutive quarter.

Four lines (workers compensation, commercial property, directors and officers, and surety) showed modest price decreases.

Commercial auto remains the outlier with meaningful price increases reported.

Demand For Commercial Insurance Up Slightly

Demand for commercial insurance continued to follow a slight upward trend in the first three months of 2017, according to the latest Council of Insurance Agents & Brokers’ Commercial P/C Market Survey.

A large number of brokers reported an increase in demand for cyber coverage as clients became more familiar with the product and more interested in purchasing stand-alone policies.

The majority of brokers, 68.5 percent, reported that demand for commercial insurance products stayed the same in the first quarter of 2017, compared to the fourth quarter of 2016.

Nearly 30 percent of broker responses saw an increase in demand, while only 2.2 percent saw a decrease.

As for pricing, the soft market continued in Q1 2017, with the average rate decline across all commercial P/C accounts at 2.5 percent, compared to 3.3 percent in Q4 2016.

This is the ninth straight quarter that commercial rates have declined across small, medium and large accounts, The Council said.

Additional I.I.I. facts and statistics on the commercial lines insurance market are available here.

Stable And Buyer-Friendly Commercial Insurance Marketplace

As hundreds of risk professionals gather in Philadelphia, the birthplace of insurance, for the annual RIMS (Risk and Insurance Management Society) conference, here’s the latest take on corporate risk costs:

  • Businesses saw a 5 percent decline in the total cost of risk (TCOR) in 2016—the third year in a row that corporates have benefited from lower prices, according to the latest RIMS benchmark survey. The study defines TCOR as the cost of insurance, plus the costs of the losses that are retained and the administrative costs of the risk management department. CFO.com has more on the findings.
  • The commercial insurance marketplace remains buyer-friendly and stable for North American insurance buyers, even as it braces for potential changes from Washington D.C. That’s the outlook from Willis Towers Watson in its 2017 Marketplace Realities report which points to the fluidity of capital as a key driver of current market conditions. The report’s line-by-line commercial insurance price predictions for the remainder of 2017 show a mix of increases, decreases and flat rates, as follows:

 

Commercial Insurance Prices Moving On Up

Insurers are moving away from the rate cuts of 2016, according to online insurance exchange MarketScout’s take on the first quarter 2017 rate environment.

For the first time in 20 months, the composite rate index for commercial accounts in the United States measured a rate increase at plus 1 percent, MarketScout said.

Richard Kerr, CEO of MarketScout:

“The plus 1 percent composite rate index was driven by larger rate increases in commercial auto, transportation, professional and D&O rates. We also recorded small rate increases in the majority of coverage and industry classifications.”

Rates for business interruption, inland marine, workers’ compensation, crime, and surety coverages held steady in the first quarter. Rates for all other coverages either moderated or increased.

By industry class, every industry experienced a move toward higher rates in the first quarter. Transportation had the largest rate increase at plus 5 percent, MarketScout reported.

Small accounts (up to $25,000) were assessed a 1 percent rate increase in the first quarter of 2017. Medium accounts ($25,001 – $250,000) were flat while both large ($250,001 – $1 million) and jumbo (over $1 million) accounts enjoyed rate decreases of minus 1 percent and minus 2 percent respectively.

Check out Insurance Information Institute facts and statistics on the commercial lines insurance market here.