Direct premium written (DPW) for property/casualty insurance companies continues to increase, albeit gradually. At year-end 2017, more than $636 billion of DPW was reported, a record high for the industry. For 2017, total DPW for all P/C insurers aggregately increased 4.7 percent over 2016, an increase of $28.7 billion.
Through the second quarter of 2018, the insurance industry’s growth trend has continued, as DPW for all P/C insurers aggregately increased 6.1 percent over 2017.
For the six months ending June 30, 2018, P/C companies comprising the Top 25 insurers in terms of DPW growth increased their DPW $7.2 billion, or 11.8 percent over the first six months of 2017. This continues the Top 25 insurers’ impressive display of premium growth and financial stability.
In contrast, the remainder of the industry reported an increase in DPW of $12.1 billion, or 4.7 percent year-over-year.
Although the market continues to exhibit signs of firming and DPW continues to increase, property/casualty 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 for this current recovery.
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 first and second quarter data, but if the industry holds to its 10-year historical pattern, growth in 2018 would again result in the highest level of year-end DPW ever reported by the P/C industry.
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