NEWS RELEASE – FOR IMMEDIATE RELEASE
Contact: Robert Boyce
Director of Market Intelligence & Insights
202.662.4305
Robert.Boyce@ciab.com
COMMERCIAL PROPERTY/CASUALTY MARKET CONTINUED
TO FIRM IN Q1 2019, ACCORDING TO CIAB SURVEY
WASHINGTON, D.C. — May 16, 2019 — The market continued to firm into the first quarter of 2019, marking the sixth consecutive quarter of increased premium pricing, according to The Council of Insurance Agents and Brokers’ Q1 2019 Commercial Property/Casualty Market Survey results. Accounts of all sizes experienced rate increases in Q1, with an average increase of 3.5 percent. The report also observed increases in premiums for all lines of business (with the exception of Workers’ Compensation), with Commercial Auto and Commercial Property both experiencing the largest hikes.
“Trends gathered from this survey’s results, along with other market surveys, events and publications, confirmed the growing consensus that there were definitive signs of broad market firming in previous quarters,” said Ken A. Crerar, President/CEO of The Council. “However, I believe we are going to have to come up with another way to describe the environment we are operating in now versus characterizing as it a hard or soft market. A confluence of factors and market dynamics illustrate a new story where companies now examine each line of business and make analytical, data-driven decisions. It is a transitioning market with a keen emphasis on new mechanisms to achieve profitable underwriting and improve loss ratios.”
As in previous quarters, Commercial Auto continued to suffer from runaway premiums and “out of control” claims, resulting in the 31st consecutive quarter of premium increases at 8.8 percent. However, Commercial Property also experienced noticeable contraction in Q1, with repeated natural catastrophe losses contributing to a 5.9 increase in premium pricing and insurers taking a more cautious stance toward underwriting. Workers’ Comp was the only line that saw a decrease in rate in Q1 at -3.3 percent.
Finding opportunities to utilize new technologies and leveraging internal data was a key theme in responses about broker priorities and challenges. Respondents agreed brokers could differentiate themselves by developing a robust consulting and risk management side of their business by using “an efficient blend of technology-assisted products combined with professional consultation to enhance their customers’ experience.” We are beginning to see an increased emphasis on automation in the insurance industry, and “smart brokers” who embrace it will be “big winners in the future,” respondents predicted. As one respondent from the Southwest said, “Insurtech is just not a word, it is a way of doing business.”