Key Insights for 2019 Q3 Property & Casualty Marketing Trends

Premium increases continued across the board through the third quarter of 2019, leaving many to question, “How long will it last?”

According to the Council of Insurance Agents and Brokers Property/ Casualty Q3 Market Report, commercial insurance buyers saw average increases of 6.2% in Q3. Large accounts witnessed significant increases at 7.6%, as well as accelerating premium increases across multiple lines of insurance coverage.

Commercial Auto continues to have a significant impact on premium pricing, up 9.1% on average. It has not been uncommon to see double-digit increases for trucking, large fleets and risks with loss history.  Auto claims have increased dramatically, with carriers struggling to recoup losses. Many are pointing towards distracted driving as a root cause. “60% of all drivers in the United States report using a phone while driving, going hand in hand with motor vehicle deaths, which surpassed the 40,000 lives mark for only the second time.”

For the first time in years, umbrella and excess premiums have taken a significant upward turn, 9.8% on average.  Respondents attributed the trends to the underlying auto fleet risks as well as an increased cost of reinsurance and so-called ‘nuclear verdicts.’ These verdicts, or awards of over $10 million,  appear to be on the rise, and the markets are taking notice.  Others attribute umbrella increases to a market correction following years of relatively soft market pricing.

Property rates continue to increase by an average of 8.8%. This increase comes following a season of prolonged Midwestern flooding, record wildfires and continued concern about coastal risks. We expect the upward pressure on property rates to continue into 2020 following more than 5 years of depressed rates.

RCM&D’s Tom Shelton commented, “A recent trip to Lloyds’ reinforced our view that the Property Market is correcting for years of undervalued portfolios, while ‘shock losses’ have indeed rattled excess carriers, leading to reduced capacity.  We are advising clients to reasonably assess their asset values and consider higher retentions to lessen the blow of premium increases.”

One bright spot for insurance buyers is workers’ compensation, which saw premiums decrease by 2.7%.  Carriers appear to be using workers’ compensation to offset pricing increases across accounts.  Significant reductions in the standard rates filed state-to-state by NCCI give carriers flexibility to compete on workers’ compensation.

You can download RCM&D’s one-page snapshot of the Q3 for 2019 results. The snapshot includes our key market observations as well as one-year trend analysis for many coverage lines, including Commercial Auto, Commercial Property, Workers’ Compensation, General Liability, Employment Practices Liability and more.

Download the One-Page Snapshot It is important to note, the report represents overall trends for the commercial property and casualty premiums. These trends may differ within a specific industry or sector.

If you have any questions about this report or would like to discuss how market trends may impact your insurance program, please contact your client service representative for more information or you may contact a trusted RCM&D advisor today.

The CIAB is the premier association for the top regional, national and international insurance intermediaries.  The Council’s market survey, released quarterly, tracks trends in the US commercial insurance markets based on data and insights from member firms. RCM&D is a member of the CIAB.