If I were the Insurance Carrier that wrote the office bop, or E&O for SNL Financial, I would give them a 24.9% increase at renewal. Yeep, the soft market is over….
If and When the market gets hard and it will the economy will have to follow or it will apply a lot of pressure on the carriers . That stated premiums will have to go through the roof to comensate Insures solvency interesting times.
Is Saturday Night Live Financial an insurance market? The only slight movement we have seen in Texas is Personal Auto & Home. Carriers who are daring to take rate are still getting their heads handed to them. The customer goes somewhere else and gets it for less so there is still plenty of competition. Commercial Lines are still very soft and most carriers are trying to renew flat and hope they keep it. It is amazing that carriers will do more cutting for new business than they will on business on the books. The good renewal business has already been underwritten, but the carrier will sometimes try to increase them at their peril.
I agree with you on carrier being more aggressive on new business than on their own renewals. Makes no sense.
In NY, some signs of a hardening market is showing in construction. A handful of carriers have pulled out of the market. Have been seeing rate increases on GCs and Electricians over the past few months. Not enough to call it a trend though.
SNL Financial is a competitor to AM Best and has some very interesting industry analysis. I would not gloss over their findings. There are places where it seems like AM Best is too close to the industry to speak the truth. I haven’t purchased anything from SNL yet, but I do like the samples they have sent me.
I am not too sure about AM Best anymore with their ratings analysis. As an example, how can they continue to give AIG companies A ratings after all the trouble they have been in. Most groups would have been downgraded significantly to B ratings in light of all the shenanigans they pulled.
Reality is the soft market must end especially when insurance companies are writing business for less than expected losses. We have definitely reached the bottom. We also expect to reserve strengthing forcing loss ratio to increase across commerical lines.
I’d like to see the lines of business and other data that SNL used for its analysis and issued its opinion on the insurance market.
As an insurance professional for the last fifteen years, there are some rate increases in the commercial market in such lines as D&O, Financial Institutions, WC/EL and Aviation.
On the other hand, there are other lines such as CGL, Property, etc that at best are seeing flat renewals. For the most part, they are seeing rate reductions of between 3-6%.
For carriers that have accounts that have been profitable, they are probably taking rate reductions to hold on to their renewals. After all, renewal business has much less expenses associated with than new business.
On unprofitable accounts or product lines, the current carrier is raising rates to compensate for these losses. With the amount of capacity that is currently in the marketplace, there is plenty of competition that is willing to snap up this business if a policyholder does not like their renewal pricing, terms and conditions.
There won’t be a hardening of the market until–reinsurers raise treaty rates (and this is passed on to property/casualty companies and ultimately policyholders), a major insurer has financial distress and there is a loss of capacity and/or the stock market continues to have days like today and insurers have to maintain greater underwriting discipline to be profitable.
We have seen greater underwriting discipline recently. We are getting requests for new applications, inspections and numerous questions they weren’t asking last year or the year before. It is called re-underwriting accounts. The problem they are facing is that the economy is weak and they can’t get increases. The customers will shop and the business will be lost because there is always a shark out there who smells blood and will take it to get the business on the books, sometimes by hook or crook.
I think it’s important to point out that in SNL’s analysis they are only looking at premium growth. It is true that premiums are going up; however, so are the exposures. All because both of these are going up doesn’t mean that rates are going up. If the premium is up 5% and the exposures are up 10% then we still have a negative net rate.
I really hope that if someone pays for this studay that they are looking at the whole spectrum not just the $.
This hard market shows no signs of ending…..the big players keep buying business to keep their market share…I just wish they would accelerate their stupidity so we can get to the end of it sooner than later.
I’ve seen estimates as high as $100b in insured losses just this morning on cnbc. Then again you should take what those pinheads say with a grain of salt. Either way, it should be interesting to see how this affects rates in the market.
I just talked to the CEO of a very large insurnace group A++ rated out of Michigan by Best. There are two main reasons for the soft market and it will continue to be soft until, revenues increase substantially, This economy has hit carriers very hard in the revenues side of the business. #2 is surplus, industry wide remains extremely high in relations to premiums written, so the carriers have enormous amounts of capacity to write more business and if interest rates and investment income starts to increase again, watch out for even more of an appetite for new business.
This market will not harden for a few years from now!
The full impact from the earthquake and Tsunami will not be felt for several months until re-insurance rates kick in. I saw where Chartis/AIG is reserving $700 million for it and other global markets have a stake as well. I think our domestic market will end up paying for this 250 Bil loss at some point with higher overall rates.
We’re seeing some increase in underwriting information requests but carriers don’t want to lose business. We’re expecting relatively flat renewals for members of our commercial book with good loss experience. Not including CA quake.
does SNL stand for Saturday Night Live because this is funny!
Dream on! I have been hearing that (actually praying for it) for at least 10 years.
If I were the Insurance Carrier that wrote the office bop, or E&O for SNL Financial, I would give them a 24.9% increase at renewal. Yeep, the soft market is over….
If and When the market gets hard and it will the economy will have to follow or it will apply a lot of pressure on the carriers . That stated premiums will have to go through the roof to comensate Insures solvency interesting times.
Is Saturday Night Live Financial an insurance market? The only slight movement we have seen in Texas is Personal Auto & Home. Carriers who are daring to take rate are still getting their heads handed to them. The customer goes somewhere else and gets it for less so there is still plenty of competition. Commercial Lines are still very soft and most carriers are trying to renew flat and hope they keep it. It is amazing that carriers will do more cutting for new business than they will on business on the books. The good renewal business has already been underwritten, but the carrier will sometimes try to increase them at their peril.
I agree with you on carrier being more aggressive on new business than on their own renewals. Makes no sense.
In NY, some signs of a hardening market is showing in construction. A handful of carriers have pulled out of the market. Have been seeing rate increases on GCs and Electricians over the past few months. Not enough to call it a trend though.
SNL Financial is a competitor to AM Best and has some very interesting industry analysis. I would not gloss over their findings. There are places where it seems like AM Best is too close to the industry to speak the truth. I haven’t purchased anything from SNL yet, but I do like the samples they have sent me.
I am not too sure about AM Best anymore with their ratings analysis. As an example, how can they continue to give AIG companies A ratings after all the trouble they have been in. Most groups would have been downgraded significantly to B ratings in light of all the shenanigans they pulled.
Most groups aren’t owned by the US government.
Those folks at Saturday Night Live Financial must be some “Wiiild and Craaazy Guys”!
Reality is the soft market must end especially when insurance companies are writing business for less than expected losses. We have definitely reached the bottom. We also expect to reserve strengthing forcing loss ratio to increase across commerical lines.
I’d like to see the lines of business and other data that SNL used for its analysis and issued its opinion on the insurance market.
As an insurance professional for the last fifteen years, there are some rate increases in the commercial market in such lines as D&O, Financial Institutions, WC/EL and Aviation.
On the other hand, there are other lines such as CGL, Property, etc that at best are seeing flat renewals. For the most part, they are seeing rate reductions of between 3-6%.
For carriers that have accounts that have been profitable, they are probably taking rate reductions to hold on to their renewals. After all, renewal business has much less expenses associated with than new business.
On unprofitable accounts or product lines, the current carrier is raising rates to compensate for these losses. With the amount of capacity that is currently in the marketplace, there is plenty of competition that is willing to snap up this business if a policyholder does not like their renewal pricing, terms and conditions.
There won’t be a hardening of the market until–reinsurers raise treaty rates (and this is passed on to property/casualty companies and ultimately policyholders), a major insurer has financial distress and there is a loss of capacity and/or the stock market continues to have days like today and insurers have to maintain greater underwriting discipline to be profitable.
We have seen greater underwriting discipline recently. We are getting requests for new applications, inspections and numerous questions they weren’t asking last year or the year before. It is called re-underwriting accounts. The problem they are facing is that the economy is weak and they can’t get increases. The customers will shop and the business will be lost because there is always a shark out there who smells blood and will take it to get the business on the books, sometimes by hook or crook.
Which carriers are showing greater discipline? The market is soft and getting softer by the second….
The Japan quake will harden reinsurance treaties; the true ultimates are coming to light.
I think it’s important to point out that in SNL’s analysis they are only looking at premium growth. It is true that premiums are going up; however, so are the exposures. All because both of these are going up doesn’t mean that rates are going up. If the premium is up 5% and the exposures are up 10% then we still have a negative net rate.
I really hope that if someone pays for this studay that they are looking at the whole spectrum not just the $.
The tragic news unfolding in Japan may, indeed, suck all of the excess capacity in the P&C coffers spiking another hard market cycle.
This hard market shows no signs of ending…..the big players keep buying business to keep their market share…I just wish they would accelerate their stupidity so we can get to the end of it sooner than later.
So according to the article, a drop of only 1.5% somehow equates to a hardening market? Must be new math.
I’ve seen estimates as high as $100b in insured losses just this morning on cnbc. Then again you should take what those pinheads say with a grain of salt. Either way, it should be interesting to see how this affects rates in the market.
I just talked to the CEO of a very large insurnace group A++ rated out of Michigan by Best. There are two main reasons for the soft market and it will continue to be soft until, revenues increase substantially, This economy has hit carriers very hard in the revenues side of the business. #2 is surplus, industry wide remains extremely high in relations to premiums written, so the carriers have enormous amounts of capacity to write more business and if interest rates and investment income starts to increase again, watch out for even more of an appetite for new business.
This market will not harden for a few years from now!
The full impact from the earthquake and Tsunami will not be felt for several months until re-insurance rates kick in. I saw where Chartis/AIG is reserving $700 million for it and other global markets have a stake as well. I think our domestic market will end up paying for this 250 Bil loss at some point with higher overall rates.
We’re seeing some increase in underwriting information requests but carriers don’t want to lose business. We’re expecting relatively flat renewals for members of our commercial book with good loss experience. Not including CA quake.