Property/casualty insurance pricing should firm in 2013: Barclays
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Property/casualty insurance prices should continue to firm in 2013, according to a report released Tuesday by Barclays Capital Inc.
But Barclays' “4Q Recap & Outlook: Strong Core P&C Results; Subdued Life Outlook” added that property/casualty insurers' strong fourth quarter 2012 results “set the bar high for 2013.”
“Positive P&C pricing should continue in 2013, especially after the impact of (Superstorm) Sandy,” said Barclays in the report. “The commercial P&C insurers remain upbeat about the P&C pricing environment, while reinsurers saw property reinsurance rates for the critical Jan. 1 renewal season mostly unchanged overall, but up 10%-plus for loss-impacted accounts.”
The report said commercial property/casualty prices are expected to increase 3% year over year in the early part of this year.
“We expect rate increases to remain in positive territory for at least the next several quarters, especially after the impact of (Superstorm) Sandy,” the report said.
Barclays said commercial and personal lines insurers' core fourth-quarter 2012 earnings “were better than expected, which improves the 2013/2014 earnings outlook.”
The report said insurers' underwriting results benefitted from an increase in pricing, contained claims costs and continued reserve releases.
But the report noted that downward pressure on investment income continues, driven by low interest rates.
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