What’s Happening and What Lies Ahead for P/C Insurance Pricing: Moody’s

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The current pricing environment for property/casualty insurers is “modestly positive,” with commercial and personal auto rates rising by mid-to-high single digits, homeowners and commercial property rates rising by low-to-mid-single digits, and commercial casualty rates showing smaller changes, according to a Moody’s Investors Service rate change and trend survey of insurers it rates.

“Through 2019, we expect rate increases to exceed loss cost trends in auto lines, to roughly match loss cost trends in property lines and to lag slightly behind loss cost trends in commercial casualty lines,” Moody’s analysts say in the survey report.
In 2016, Moody’s says the personal auto-wage rate should fall from 7.5 percent at 2016, 7.5 percent at 2017 and 6.5 percent at 2018, from low to mid-single digit levels.

Moody’s sees the moderate uptrend in real estate rates, particularly in the worst-hit regions, including the 2018 disaster, especially Hurricanes Florence and Michael.

Here’s more from Moody’s insurer survey and analysis:

Personal Automatic
While the ratio of personal auto insurers increased by 6.5% in 2018, after 7.5% in 2017, it should support continuous improvement in insurance results. Moody’s estimates that this rate slows as much as the frequency of automatic losses, and that in 2018-2019 the combined rates fell down to 100. In 2015-16, the reduction of written results, due to more mile drive, more distracted drivers and higher repair costs for sensor and camera vehicles. Insurers expect collision avoidance technologies to drop in the next few years due to loss frequency trends. Moody’s sees large national personal car insurance companies that continue to gain market share at the expense of small regional companies, where large and low-cost direct authors continue to grow fast.

Homeowners
In 2018, homeowners seeking 4.5 percent overall increases expect low-to-mid-single digits to keep up with rising costs for construction labor and materials. Moody’s believes that the 2018 disaster will continue its upward pressure on homeowners and other property rates. At the same time, abundant capital will keep a cover as the overall ratio increases.

Commercial property
Given the disasters and increased construction costs, allow rates to continue at a moderate rate. In 2018, commercial real estate insurers attempted to go up by a 4.0 percent increase, a general decline in 2015-16, and an increase in flat pricing in 2017. Moody’s expects insurers to continue to increase their rates at low single digits. The report expects the 2018 disaster to continue to increase loss costs and rates, while the P / C market has kayıp enough capital to cover recent events and limit overall rate increases, Rapor he says.
Commercial Automatic
According to Moody’s, despite the dramatic increases since 2012, the commercial car remains one of the worst performing P / C insurance lines. The 7.5 percent increase in 2018 will be followed by a 7.5 percent increase in 2018, helping to reduce the combined rates from the last high levels to about 105-106 in 2019. Insurers see the cost of commercial automatic losses, increasing by 4 to 5% in 2018-19, to a tight labor market that provides increased shafts, high advocacy for claims, massive leaks (over $ 10 million), and a job for transportation companies and inexperienced drivers. pointing out. Uz We believe rising costs have led to a general lack of replacement for the commercial auto line, Mood says Moody’s.

Worker compensation
Moody’s surveyed insurance companies expected workers’ compensation rates to drop by 2.0 percent in 2018, following a gradual decline in 2015-17. Moody’s expects lower rates to cause the crash years to drop from 98 in 2017 to 101 in 2019. As the tight labor market leads to higher wages, payroll-based premium increases will also prevent compensation cost increases. Insurers expect the medical cost trend to remain in single households. For the second quarter, Moody’s said Hartford reported a higher loss frequency for the first time over the years, citing employers hiring inexperienced workers. However, the overall loss cost trend is expected to remain low. He says insurance companies are prudent to grow workers’ compensation books due to long-term losses and uncertainty about LAE reserves, low investment returns and medical costs. AIG, which is a great carrier that reflects this attention, reduced its presence in the labor compensation market in the United States from its third-largest in 2014 to its ninth-largest. Moody’s said the major players and AIG’s actions fiyat have helped to limit price competition in this direction Mood. ”

Commercial General Liability
Moody’s research, insurance companies in 2018, the commercial general lending rate in 2018, 1.5 percent, and in 2016 found that 1.0 percent. Moody’s dropped from 101 to 1019 in 2017, from a total of 197 to 103. increases. Moody’s has warned of higher non-product liabilities (slippage and fall) claims among smaller insurance companies serving medium-market businesses, increased attorney involvement in allegations, and negative auto-liability trends in commercial umbrella policies. The rating agency adds that CGL authors have suffered low investment returns and ları aggressive litigation against insured parties or extended comments on insurance coverage Derecelendirme.

Professional Responsibility
Moody’s survey reported that insurance companies increased by 1.5 percent in 2018, following a slight decline in 2016/17. However, Moody’s projects, which combine these rates, will increase from 104 in 2017 to 104 in 2019, partly due to the increasing costs of directors and civil servants and the demands of errors and omissions.

Commercial Multiple Danger
Moody’s surveyed insurers need an increase of 3.0 percent for trade coefficients in 2018, 2.0 percent in 2016 and 1.0 percent in 2016, 3.0 percent they are. The commercial multiple risks were divided into 63% / 37% of the property and debt coverage. The catastrophic losses increased to about 107 in 2017 after four years in the mid-high 90s. Insurers expect the non-catastrophic loss rate trend to remain below the long-term average of 1.3 percent. Moody’s, insurance companies for 2018-19 “for this line is a slight increase in risk appetite,” he said. On the other hand, increased attorney participation and increased construction labor costs have potential difficulties.

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