For Immediate Release
New York Press Office: Michael Barry, 917-923-8245, email@example.com
NEW YORK, March 30, 2023—Slow underlying growth and inflation are among the biggest challenges facing U.S. auto, home, and business insurers, according to the Insurance Information Institute’s (Triple-I’s) Q1 2023 Economic Outlook.
The Outlook’s key takeaways are below:
P/C Underlying Growth and Replacement Costs
“We expect long-term growth to remain below 2 percent and long-term inflation to remain above 2.5 percent,” said Dr. Michel Léonard, CBE, Chief Economist and Data Scientist, Triple-I. “A recovery by year-end 2023 remains unlikely as the Fed continues its hawkish policy and bond yields increase. However, the Consumer Price Index is likely to decrease as pandemic supply chain disruptions ease, and commodity and energy prices reach a precarious war-time equilibrium.”
U.S. GDP Growth and Inflation
The Triple-I is slightly more optimistic than the U.S. Federal Reserve when it comes to the U.S. Gross Domestic Product (GDP), forecasting the nation’s GDP to grow slightly above Fed expectations between 2023 and 2025.
The macroeconomic fundamentals for P/C insurers are forecast to be mixed for the balance of this year, according to Triple-I’s analysis.
“Property and casualty insurer net premiums written are forecast to continue to grow due to hard market conditions regardless of slowing underlying growth,” said Dale Porfilio, Chief Insurance Officer, Triple-I. “Underwriting losses, however, are expected to persist, driven by challenging results in personal lines.”
Net premiums written are premiums written after reinsurance transactions. A hard market is a seller’s market. It describes an environment is which insurance is expensive and in short supply.
The full report is available to Triple-I member companies only. Triple-I subject matter experts are available, however, to discuss the Q1 2023 Economic Outlook’s main findings.
Triple-I Blog: Joint Industry Forum 2022: Combined Ratio Takes Center Stage
Triple-I Publication: A Firm Foundation: How Insurance Supports the Economy
Triple-I Video: Insurance Economic Outlook: Q1 2023