Insurance Industry Will Continue to See Rate Increases into 2013
Insurance analysts see 2013 continuing the upward pricing trend for the property/casualty industry. Keefe, Bruyette & Woods (KBW), a full-service boutique investment bank and broker-dealer that specializes in the financial services sector, recently said that “the P&C insurance market environment is expected to be pretty much the same as what we’ve seen in 2012—modest rate increases…” Furthermore, ALIRT Insurance Research, which specializes in the analysis of insurance company financial performance trends, stated that it expects “gentle premium increases,” with factors that “may well moderate price increases going forward.”
Dr. Robert Hartwig, president of the Insurance Information Institute (I.I.I.), has stated that Commercial Lines rates across the board have strengthened in 2012 when compared to 2011 and all indicators reflect a positive pricing momentum moving forward. Dr. Hartwig also sees that the firming trend specifically in Workers Compensation that began in 2011 and gained momentum in 2012 is likely to remain strong in 2013.
What’s more, Workers Comp was the fastest-growing line in 2011 with premium volume up 10%. “When all the numbers are in for 2012, we’re likely to eclipse that 10% in terms of growth,” said Dr. Hartwig in an interview with ProgramBusiness.com, an online platform that promotes markets and products and provides insurance agents and brokers with the ability to place specialty lines and difficult risks. “This [increase] is due to three factors: the firming of rates, continued expansion of payroll exposure as more jobs have been added this year, and wage growth. All three of these are pushing Workers Compensation in the right direction.”
Both MarketScout, a Dallas-based insurance distribution and underwriting company, and Towers Watson, a global professional services company, released reports showing pricing trends for property and casualty going up. According to MarketScout, the overall composite rate for property and casualty commercial accounts throughout the United States was up 5% in November 2012 compared to the previous year. And Towers Watson said that commercial insurance prices in aggregate increased by 6% during the third quarter of 2012. Workers Compensation saw the largest increases.
As we move into the new year, Caitlin-Morgan can provide you with markets in securing Workers Compensation and other coverages for your clients. Whether your client is a minimum premium Workers Comp account or a tougher-to-place risk, Caitlin-Morgan is here to help you meet your clients’ needs. Please give us a call at 877.226.1027.