Direct premium written (DPW) for property/casualty insurance companies continues to increase, albeit gradually. At year-end 2016, approximately $606 billion of DPW was reported, a record high for the industry. For 2016, total DPW for all P/C insurers aggregately increased 4 percent over 2015, an increase of $23.4 billion. Through the third quarter of 2017, the insurance industry’s growth trend has continued, as DPW for all P/C insurers aggregately increased 4.7 percent over 2016.
For the nine months ending Sept. 30, 2017, P/C companies comprising the Top 25 insurers in terms of DPW increased their DPW 12.9 percent, or $11.4 billion over the first nine months of 2016. This continues the Top 25 insurers’ impressive display of premium growth and financial stability. The Top 25 accounted for 52 percent of the growth in the P/C insurance industry’s DPW. In contrast, the remainder of the industry reported an increase in DPW of 2.8 percent, or $10.3 billion year over year.
Although the market continues to exhibit signs of firming and DPW continues to increase, P/C insurers should not expect a traditional hard market in the near future. More importantly, it is possible that the double-digit premium growth experienced in the historical hard market cycles may have created unrealistic premium growth expectations.
It is more realistic that expectations should relate to gradual, stable growth. There is always a fair amount of uncertainty in making projections based on third quarter data, but if the industry holds to its 10-year historical pattern, growth in 2017 would again result in the highest level of year-end DPW ever reported.