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The hard insurance market may see some “thawing” during 2021, experts said during an Advisen virtual conference, but any sudden changes remain unlikely.
“[The hard market has] been going on for about two years now, and I suspect we have a little more time to go,” said Elizabeth Johnson, chief underwriting officer for Ascot Group, according to Advisen.
The severity of claims and social inflation, along with low investment yields, have put “tremendous pressure” on casualty portfolios throughout the industry, Johnson reportedly said.
“My guess is it’ll be a gradual stabilization,” said Paul Carleton, executive vice president of business development for Old Republic Risk Management, Advisen reported.
Price Increases Slowed in Q4
According to a couple of industry tracking reports, commercial insurance prices climbed at a “slightly slower” pace in Q4 of 2020.
The Council of Insurance Agents & Brokers (CIAB) Commercial P/C Market Survey found premium prices rose an average of 10.7% at the end of 2020.
Large accounts coped with a 13.7% average premium increase, CIAB said in the report, down slightly from an average of 15.3% in Q3.
Similarly, Willis Towers Watson’s Commercial Lines Insurance Pricing Survey (CLIPS) reported price increases hit their highest level since 2003 during Q4 2020, with average prices jumping more than 10%.
Glimmers of Market Competition
During Advisen’s Casualty Insights conference, Jesse Paulson, managing director of Marsh’s U.S. excess casualty practice, said there are “glimmers of competition” for certain coverage lines and accounts. That does not mean rates will flatten or drop.
“It does mean you’ll have a little bit of added stability in the market, so it shouldn’t be as dramatic as people saw in 2020,” Paulson said, according to reports.
