BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
North American businesses are paying more for insurance, according to the Insurance Marketplace Realities 2020 report released Wednesday by Willis Towers Watson PLC.
“Call it what you will: a firming market, a challenging market, a seller’s market, a disciplined market, an unconventional hard market,” pricing increases will continue through next year and possibly further, the report said.
“Market conditions are challenging to clients,” Joe Peiser, New York-based global head of broking for Willis Towers Watson, said in an interview. “We expect prices to continue to rise in property throughout 2020.”
In all, 19 lines are expected to see price increases, according to the report. International casualty and surety will see decreases; and fiduciary, environmental, marine, kidnap and ransom, and terrorism insurance will see a mix of both or flat renewals. The rest, including property/casualty lines, will see increases.
The three lines of coverage most affected are property insurance, lead umbrella insurance, and public company directors and officers insurance, Mr. Peiser said.
While insurance markets are expected to tighten further, they should become more “orderly” by mid-2020, Mr. Peiser said, with more forecastable parameters for limits and coverages.
Insurers that cut back property capacity over the past 12 months should be largely finished with those adjustments, he added.
By mid-2020, “the bulk of the re-underwriting by some major property insurers should be largely complete,” the report said. “Pricing will most likely continue to rise as insurers seek profitability, but those increases and market capacity for most risks should be more predictable than they have been during the past two quarters.”
Property pricing will nonetheless continue an upward march, according to the report.
“In 2019, we saw big property hikes for those renewing in Q2, Q3 and so far in Q4. Q1 2020 buyers, it’s your turn,” the report said. “And with carriers showing a steady willingness to withhold capacity in their disciplined approach to underwriting these days, the rate hikes in many cases are going to leave a mark.”
On the long-tail side, premium rates in the auto sector are still catching up with eight years of climbing losses, the report said, while general liability is beginning to “show signs of distress due to loss severity.”
The report cites what “appears to be a fundamental and systemic change in liability losses,” adding that in the D&O segment, the annual number of shareholder class action lawsuits has doubled in less than three years.
D&O insurance poses challenges, Mr. Peiser said. “Not only will prices rise and capacity shrink, but it will be unpredictable for probably four to six quarters,” he said.
“The range in price increases we’ve seen in public company directors and officers has been substantial, as low as 5% and as high as 50%,” Mr. Peiser said, adding that this shows underwriters are not simply applying a blanket rate increase to all clients.
Striking one optimistic point, the report said that despite some loss creep associated with alternative capital leading to increased losses on investments, “alternative capital is not going away. It’s not even retreating to any great extent. Many institutional ILS investors are in it for the long term.”
Insurance premium renewal rates in the first quarter of 2019 increased across most major commercial lines compared with the previous quarter, except for workers compensation, insurance exchange Ivans Insurance Solutions said Tuesday in a report.