Commercial Insurance Prices Will Likely Continue to Rise
Increased prices in the commercial insurance industry will likely continue through the end of 2019 and into 2020, according to industry experts speaking at the Insurance Leadership Forum in Colorado last week.
Experts said that some parts of the insurance market are relatively soft, though the market trend is that single insurers provide more expensive coverage and lower limits. Following large property losses in the past two years, underwriters are now looking to bring in increased revenue.
Rate increases first started in lines such as property, excess casualty, and directors and officers liability, all of which have experienced large losses, according to Brian S. Wanat, Chief Broking Officer at Aon PLC. Now, rate hardening has spread to most lines, especially for large accounts.
“With each passing month, rates have gone up more,” Wanat said. We’re looking preliminarily at Q3 being greater than Q2, and we see it gaining momentum at this point.”
Mike Rice, Chairman and CEO of RSG Underwriting Managers, said that business that previously left the surplus lines market for the admitted market is now returning to surplus lines and is seeing rate increases, though he thinks it’s still too early to call it a hard market.
The panel noted that the primary insurance market is firming more quickly than the reinsurance market, but reinsurance rates increased at the beginning of 2019 and at mid-year renewals.
Overall, there is a consensus among industry leaders that rate increases will continue through at least 2020, though some coverages may experience longer periods of increased rates.