NEWS RELEASE – FOR IMMEDIATE RELEASE
Contact: Robert Boyce
Director of Market Intelligence & Insights
202.662.4305
Robert.Boyce@ciab.com
MARKET TIGHTENING CONTINUED INTO Q4 2018, ACCORDING
TO CIAB COMMERCIAL P/C MARKET INDEX
WASHINGTON, D.C. – March 5, 2019 – The market continued to firm in the fourth quarter of 2018, according to results from The Council of Insurance Agents & Brokers’ Q4 2018 Commercial Property/Casualty Market Survey, released today.
Premiums were up across the board and there was general agreement among respondents that carriers were underwriting more conservatively, soliciting more information (through applications and other forms), and exhibiting more willingness to walk away from taking on certain risks. Average premium prices across all-sized accounts edged above 2 percent for the first time in 2018, while the average increase across all lines of business remained around 2 percent.
“Firming continued into the fourth quarter of 2018,” said The Council’s President/CEO, Ken A. Crerar. “With the exception of Workers’ Compensation, Cyber and Terrorism, all lines saw slight to moderate increases in premium pricing. For the past five or so quarters, the Commercial Property/Casualty market has been rebounding from a choppy market, due to excess capital and alternative methods of risk transfer. Additionally, another historic natural catastrophe season most likely affected premium pricing across commercial property lines as well.”
Commercial Auto saw an average premium price increase of 7.0 percent in Q4 2018, marking the 30th consecutive quarter of rate increases for this particular line. This increase in premium pricing for Commercial Auto was one of the main factors behind increased premiums for all-sized accounts in Q4 2018, alongside Commercial Property (increase of 2.9 percent) and Construction Risks (2.4 percent).
Respondents’ clients’ interest in Cyber was sustained into Q4 2018, with 76 percent of respondents reporting they had seen increased demand for cyber insurance. Respondents made clear this was one of the reasons the cyber insurance market was so soft in Q4 2018, and in The Council’s most recent Cyber Market Watch Survey, respondents also identified competition between carriers and the emergence of new markets as reasons for market softness. For the first time in 2018, Workers’ Compensation was not the only line to see a decrease in premiums: Cyber reported an average premium price decrease of 2.0 percent as well.
“Driving organic growth” and “recruiting and developing talent” continued to go hand in hand as respondents’ top two challenges and priorities. Respondents agreed that in order to confront these challenges, brokers need to “maximize use of technologies and analytics” and move away from “‘just selling insurance’ to managing business risk from wherever it appears.” “Many businesses need the counsel of brokers due to the complex environment we are in,” said one respondent. Technology can help them meet that need.