The Current State of the Property & Casualty Insurance Market, and How to Get Ahead in 2020

The insurance industry in the United States continues to generate growth in its various subcategories, maintaining overall profitability even amid a shaky global economy. In the U.S., the property and casualty (P&C) sector is carrying on from a strong 2018 which saw net income rise 66 percent to more than $60 billion. Now, heading into a new year, that momentum is expected to keep the industry rolling.

Some of this positivity in the market can be attributed to changes in reinsurance purchasing that was prompted by the Tax Cuts and Job Act of 2017. But P&C insurers around the globe are growing premium volume by raising rates. This is due to needing to compensate for liability and catastrophe losses on top of lower yields on certain securities.

Here’s a more detailed look at the P&C market and how companies can get ahead this year.

Increases and More Increases

The P&C market saw major increases in all geographic regions, and were most prominent in financial and professional liability, spurred on by higher losses in directors and officers coverage. Property coverage also saw a sizeable increase because of the higher disaster losses over the last few years with major storms and hurricanes making headlines.

Moving forward, the U.S. P&C market should be seeing modest deterioration according to S&P Global Market Intelligence. Growth rates could also see shortcomings by a slowing economy. According to Deloitte, GDP growth should fall to 1.6 percent this year after a few years on the rise.

According to Wholesale Trading Services Inc., the market’s influencers are having unique impacts on the new year and what providers and consumers alike can expect. For instance, social inflation, or societal changes, have resulted in large jury verdicts where corporations and insurance companies are hit with liability. What’s more, with the push for socioeconomic events, claims related to the opioid epidemic, wildfires in California, and #MeToo are all bringing about a change in how carriers are affected.

In response, carriers are opting to raise minimum premiums needed to deploy insurance limits for coverages such as professional liability. Also, further reliance on reinsurance is playing a role in carriers’ responses, which is creating an adverse influence.

How to Get Ahead of the Market in 2020

As 2020 hits its stride, it’s important to look at the influences of what’s driving sudden changes in the market. So, what can be done in order to carve out a place in the ever-changing and potentially fragile P&C landscape this year?

First, it’s important to be realistic about managing expectations when it comes to working with consumers and buyers. Distressed lines and auto-driven exposure, flat or reduced rate renewals, and excess rates are unlikely.

Next, carriers should act cautiously and conduct loss runs early. Unexpected adverse trending will likely result in reduced capacity offered by carriers and major price increases. Accounts with severity are not viewed well and alternative carriers to incumbent are not going to put their support and trust behind the risk.

Also, it’s important to obtain the incumbent carrier’s position on offering up renewal early and often. This will give extra time to answer questions around cut back limits, final premium results, and if they will renew at all.

About Genesee General

At Genesee, we strive to provide quality insurance solutions for the Commercial E & S sector. Our longstanding expertise has allowed us to successfully serve your clients for over three decades. Our specialized products include coverages for Transportation, Garage, P & C, Professional, Brokerage Property, Specialty Programs and many more. For more information about our products, we invite you to contact us today at (800) 282-8755.