Direct premium written (DPW) for property/casualty insurance companies continues to increase, albeit gradually.
At year-end 2018, total DPW for all P/C insurers aggregately increased approximately 4% over 2017, an increase of $33.3 billion.
For year-end 2018, nearly $670 billion of DPW was reported, which was a record high for the industry. Through nine months of 2019, the insurance industry’s growth trend has continued, as DPW for all P/C insurers aggregately increased approximately 4.9% over 2018.
For the nine months ending September 30, 2019, P/C companies comprising the Top 25 insurers in terms of DPW growth increased their DPW 12.4 percent, or $8.6 billion, over the same period in 2018. This continues the Top 25 insurers’ impressive display of premium growth and financial stability.
The Top 25 accounted for 35% of the growth in the P/C insurance industry’s DPW. In contrast, the remainder of the industry reported an increase in DPW of approximately 3.7%, or $16.2 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 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 third quarter data, but if the industry continues to hold to its 10 year historical pattern, growth in 2019 would again result in the highest level of year-end DPW ever reported by the P/C industry.
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