For the first time in recent memory, P&C carriers are forecasting some moderate to major rate increases, and it looks like it is more than just trying to “get rate.”
Consider these recent headlines:
- The market – largely due to the back-to-back catastrophes of hurricanes Harvey, Irma and Maria – and the Sonoma/Napa fire – is now heading for a correction. These natural catastrophes will produce a $100 billion loss year for the industry.
- Hannover Re, the world’s third-biggest reinsurer said on Wednesday (11/8/17) that it sold its entire stock portfolio, worth about 953 million euros ($1.1 billion), to help pay for claims from hurricanes and earthquakes.
- AIG saw $3 billion in catastrophic losses in Q3, and is pursuing double-digit rate increases.
- Chubb saw pre-tax Q3 catastrophic losses of $1.9 billion, and sees rates hardening across multiple lines. CEO Evan Greenberg states that Chubb will demonstrate leadership to get adequate risk-adjusted pricing and returns.
At ABD, we want to be out in the lead on these types of notices. We will keep you apprised of the market conditions as they change and as usual, will work diligently to mitigate any potential increases with a strategic marketing effort. These headlines lead us to believe that the increases may be more than just in the wind/hurricane impacted areas, which could see up to 25% increases. Other lines are likely to see single to low double digit increase for the first time in many years. While there will be pressure for some rate adjustments, ultimately, your insurance program will be based on your individual risk characteristics and may be immune from these rate hikes.
More to come…