Commercial Property Rates Stabilizing As We Enter 2012

In December, commercial property rates increased two percent, according to MarketScout, an insurance distribution and underwriting company headquartered in Dallas, Texas. Additionally, property catastrophe prices for January renewals are firming due to loss and layers affected, the frequency of events and regions of exposures, and the magnitude of the RMS version 11 Hurricane model, which was introduced in February 2011.

Even with these moderate increases and several big losses in 2011, reinsurers are still well capitalized, and the health of these companies is much better than in years past. They’re better prepared for a storm, and we’re not seeing double-digit increases as we did post-Hurricane Katrina. In addition, even though we had significant losses in 2011 on a global basis, we’re not seeing, as we did in the past after an event occurs, some insurers going out of business. In fact, if you were to compare the number of property cat writers pre- and post-Katrina, you’ll see that there are 50% more property cat writers today.

According to Dr. Robert Hartwig of the Insurance Information Institute (I.I.I.), “the market remains very competitive, capacity is available both at the insurance and reinsurance levels. There is no real market disruption of any sort, even in the wake of the major catastrophes we experienced.”

Furthermore, insurers are looking at their book of business to make sure they adequately price certain regions and to make sure they can handle a series of cat losses, whether it’s a hurricane and a major earthquake or three consecutive hurricanes as we saw with Katrina, Rita, and Wilma.

As an MGU and wholesaler, Caitlin-Morgan has markets for commercial property insurance for a many different classes of business. We’ll work with you to uniquely tailor each and every policy to ensure that exposures are covered for property owners in almost every industry. Give us call at 877.226.1027.