A survey conducted by the Insurance Information Institute (I.I.I.) at its 18th annual Property/Casualty Insurance Joint Industry Forum found that property/casualty insurance industry leaders believe Congress will delay implementation of the Biggert-Waters (BW) reforms to the National Flood Insurance Program (NFIP).
Some 75 percent of respondents expect Congress will delay implementation of the Act intended to help reduce the debt of the NFIP, a debt now estimated at more than $25 billion, by bringing rates charged more in line with the risk and losses in flood-prone areas, the I.I.I. survey revealed.
A majority of respondents to the surveyÃ¢â‚¬”93 percentÃ¢â‚¬”also believe the Terrorism Risk Insurance Act, which is set to expire at the end of this year, will be reauthorized by Congress.
Meanwhile, a panel of industry chief executives agreed that a repeat performance of the property/casualty industryÃ¢â‚¬â„¢s stellar 2013 performance will be hard to repeat.
The CEOs said higher rates, fewer-than-normal catastrophes, and strong stock market returns seem likely to make last year one of the best of the past decade.
But new challenges in growth and price competition make a repeat performance unlikely this year, the CEOs said.
By lines of insurance, only 35 percent of I.I.I. survey respondents believe there will be an improvement in profitability in personal auto in 2014, while 45 percent expect an improvement in homeowners profitability.
Only 40 percent expect an improvement in profitability in commercial lines, while 50 percent expect an improvement in workers compensation.
Looking at economic growth, 40 percent of insurance industry leaders think the U.S. economy will accelerate and 58 percent think it will remain the same, according to the I.I.I. survey.
Dr. Steven Weisbart, senior vice president and chief economist with the I.I.I. said:
Many economic forecasts say that the U.S. and most global economies will grow stronger in 2014, and this means a greater need to protect more assets and income, which leads to greater insurance premium volume.Ã¢â‚¬
Some 30 percent of survey respondents believe that premium growth will be higher in 2014; 42 percent believe it will remain flat; and 28 percent believe it will be lower.
In terms of capacity, as measured by policyholdersÃ¢â‚¬â„¢ surplus, 73 percent of respondents expect it to increase; 20 percent believe it will remain flat; and 7 percent believe it will decrease.
Some 68 percent believe the combined ratio (the percentage of each premium dollar a property/casualty insurer spends on claims and expenses) will be higher in 2014 compared to last year.