Rate hikes moderate as market recapitalizes after 2017 catastrophes
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The rate increases that followed last year’s catastrophes are beginning to moderate, says Willis Towers Watson P.L.C. in a report issued Thursday.
Between hurricanes Harvey, Irma and Maria and the California wildfires, “the latter half of 2017 brought record-breaking losses in the market,” says the report, Insurance Marketplace Realities Overview, 2018 Spring Update.
Property rates rose in response, “steeply for buyers with catastrophe exposures and losses, but no insolvencies resulted. The rate increases are already beginning to moderate, with some decrease again becoming possible for better risks,” the report said, pointing to the swiftness which with the industry capitalized.
The report says 10 lines are expecting increases ranging from flat to 20%: auto, casualty, employment practices liability, energy, environmental, errors and omissions, health care professional liability, senior living and long-term care, product liability, property and trade credit.
In particular, property, health care professional liability, senior living and long-term care and environmental will experience hikes of up to 20%, according to the report.
Two lines are expecting decreases: international, where rates are expected to be down 5% to 10%; and political risk, where rates will be flat to down 2%, according to the report.
Lines that are predicted to have a mix of small increases and decreases or flat rates are: aviation, cyber risk, construction, directors and officers, fidelity and crime, fiduciary, kidnap and ransom, surety, terrorism and political violence, and workers compensation.
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