In a volatile Property and Casualty Insurance market, keeping up to date on pricing, availability and other variables is critical to your protection and your bottom line. That’s why Alera Group is releasing our Property and Casualty Market Update, an analysis of multiple lines of P&C coverage, with insights gained from July 1, 2023, policy renewals.
A follow-up to our 2023 Property and Casualty Market Outlook and March 2023 Commercial Property Update, this Property and Casualty Market Update is also a bridge to our next annual Market Outlook, which you can expect to see in December.
Why all the market reports? Because conditions change. Frequently. And sometimes dramatically.
Nowhere is this truer than with Property Insurance coverage. When Alera Group released its Market Outlook last December, for example, the full impact of Hurricane Ian on property claims had yet to be determined. With information gleaned from January 1, 2023, renewals, we were able to provide valuable information in the Commercial Property Update, which helped guide decisions on July 1 renewals. And on we go.
Conditions vary from coverage to coverage
So, what are the key takeaways from our latest update? Even without factoring the impact of Hurricane Idalia’s August 30 strike on Florida and other parts of the Southeast, we know that Property Insurance continues to be increasingly challenging, especially in catastrophe-prone areas. But we also know that Property Insurance is an exception, with much of the P&C market showing greater stability.
Here are some highlights.
- The market is less volatile. Pricing continues to rise but at a flatter rate, capacity is sufficient, and additional coverages are more available in some segments.
- Property Insurance remains problematic. Catastrophic events including tropical storms and wildfires continue to cause rate increases, along with reduced availability and capacity.
- Cyber Liability conditions are much improved. After seeing rate hikes of 50% or more last year, policyholders are seeing increases averaging 3.6%, with some renewing at reduced rates.
- Insurers are carefully managing capacity. If you’re not in an area with heightened catastrophe exposures and you demonstrate risk mitigation measures, you’re more likely to find available coverage. Layered coverage will be necessary for many insureds.
- The average overall price increase for Property and Casualty coverage is 8.3%. Workers’ Compensation prices have dropped considerably, but Property Insurance continues to climb.
- Underwriters remain selective. Be prepared to provide ample, detailed information during the application/renewal process.
- Insurance buyers are changing strategies. While the insurance industry continues to struggle with the effects of catastrophic events and social inflation, market conditions are improving for some lines of coverage and buyers are becoming more strategic. Lowering limits, increasing deductibles, self-insuring and using alternative risk solutions are among the strategies buyers and their brokers are implementing.
Deeper look, informed decisions
The Property and Casualty Market Update takes a deeper look at strategies for getting the best the market has to offer and provides a coverage-by-coverage analysis of the principal factors influencing the market. Understanding why conditions exist will help you decide what to do about them as you work with your insurance broker on designing the P&C program that’s best for you and your business.
About the author
Executive Vice President/National Property and Casualty Practice Leader
Mark Englert has more than 30 years of insurance industry and related experience. As Executive Vice President and the Property and Casualty Practice Leader for Alera Group, he works closely with our offices across the nation to enhance client experiences, build out new capabilities and solutions, and coordinate services and resources.