Tumultuous Year Likely to Lead to Insurance Increases

A number of recent natural catastrophic, and man-made events has helped propel uncertainty in the insurance market to an all-time height. Carriers are getting hit from all different directions and on a global level. These costly events include Hurricanes Harvey, Irma and Maria; a catastrophic 8.1 magnitude earthquake in Mexico City; devastating wildfires in California; even property claims as a result of cyber-attacks on companies such as Merck.  Insured loss projections and trending toward one of the worst years ever for catastrophe losses for the P&C industry.

While there were hopes that these events would be contained as “earnings” events, it has been clear that the quantity and magnitude have led to the transition to a “capital” event, with increased pressure to sell off assets to generate money to pay claims. Carriers have blown through their catastrophe reinsurance treaties, incurring significant additional expenses to replenish their reinsurance. Those without reinsurance are facing financial pressure for their net exposure from the events.  

Here are some statistics for the insurance market in 2017:

According to President and CEO of Scor US, Jean-Paul Conoscente, in an article by The Insurance Insider “The industry writes about $150B of reinsurance worldwide – so basically we wiped out one year of premium for the whole reinsurance industry.” There is no doubt that as a result of this tumultuous year, the industry is facing a hike in rates and deductibles as well as reduced loss limits and tighter coverage terms. In fact, a recent article indicates that US underwriters are already beginning to demand rate increases at renewal.

It is critical for organizations to evaluate how these circumstances will affect their insurance program; especially those who did not experience a claim this year, and may expect the recent year’s downward rate trend to continue.  Please contact me at or at 484.581.2813  if you would like to learn more or to discuss your own insurance concerns.