Gloria Gonzalez 12/7/2018 1:26:00 PM
Source: Business Insurance
Most property/casualty policyholders are expected to experience flat to 5% rate increases in 2019, with pricing challenges likely to persist in specific coverage lines such as property-exposed accounts in wind-prone areas, habitational risks and large commercial trucking fleets, according to a report by USI Insurance Services LLC.The property/casualty industry is well capitalized and surplus now stands in excess of $760 billion, according to USI’s 2019 P&C Insurance Market Outlook Report released on Friday. The industry’s combined ratio as of mid-2018 is 98%, according to various rating agencies, but this will likely approach 100% by year’s end, the report predicted.“P&C market surplus will likely continue to grow, fueled by a booming economy, resultant growth in net written premiums and ever-expanding levels of alternative capital,” the report stated. “In the face of competition from other carriers looking to deploy their surplus capital, incumbent markets are often reluctant to walk away from what they perceive to be below-market pricing and will rather look to strike a compromise with clients and brokers to retain business.”Policyholders in windstorm, flood and fire-prone areas are likely to experience upwards rate pressure while those in more hazardous industries or with deteriorating loss profiles may be forced to consider retaining more risk to maintain rate, according to the report.