US Property Insurance Rates Fall for First Time Since 2017

By | September 17, 2024

US property insurance rates are decreasing for the first time in almost seven years, after insurers returned to profitability amid lower losses tied to catastrophes.

The average US property insurance rate decreased 0.94% in the second quarter from a year earlier, following several periods of softening increases over the past year, according to a property market report from Aon Plc. It’s the first time rates have decreasedsince the third quarter of 2017.

“We, along with our clients, are excited that rates are finally decreasing,” Vincent Flood, Aon’s US property practice leader, said in an interview. “Clients definitely had rate fatigue.”

In recent years,more frequent losses weighed on US insurers’ profitability, leading rate increases to surge past 30%in the third quarter of 2020. Then, rising interest rates put further pressure on the sector as investors left the reinsurance market in search of alternative investments, Flood said.

Last year, lower losses from catastrophes meant insurers returned to profitability, allowing them to allocate more capital to their property insurance businesses, boost their growth ambitions and adopt aggressive pricing strategies.

Rate moderation is expected to continue in the current quarter and could persist if losses tied to catastrophes remain low during the last months of the year, according to Flood.

“If we were to have a significant event, then I would see the market stabilizing again,” he said. “But absent of that, I think we’ll continue to see rates decline in 2025.”

Photo: Photographer: Daniel Acker/Bloomberg

Topics USA Pricing Trends Property

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Latest Comments

  • September 23, 2024 at 11:24 am
    Tim says:
    Yeah, premiums are flattening due to very heavy coverage restrictions, especially in the wind/hail sector. Huge deductible increases and exclusionary wording.
  • September 19, 2024 at 6:59 am
    PolarBeaRepeal says:
    Property insurance rates are decreasing .94% and inflation (of insured values to which they are applied) is transient. No need to worry. Carry on!
  • September 18, 2024 at 1:00 pm
    Dan Wilkerstead says:
    Rates are decreasing 1 % after 73% last 3 years. Deductibles are higher and the AI weather system models are not any better. Besides that, everything is fine.

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