Reinsurance News

Catastrophe exposed property rates typically up 15-20%, says Miller

26th April 2023 - Author: Saumya Jain

Brokerage Miller Insurance Services has released a report stating that it is seeing property rate increases for clean, non-cat renewals of +10% for loss-affected lines.

MillerAt the same time, and in contrast to the company’s Q1 update, catastrophe (CAT) exposed business will now typically start at between +15% to +20% rate increase, dependent on the quantum, risk profile and amount of capacity required from our markets.

The broker notes that pressure has continued to increase in respect of Gulf and tier 1 wind exposed risks.

“Other than Florida we are seeing rate movement upwards of +15% for clean renewals. Florida is understandably being treated differently, with a +20% in rate increase as the common starting point on renewals, but would caveat that this can vary widely as carriers continue the process of re-assessing their portfolios and as a consequence the premium and deductible levels at which they are prepared to continue with Florida placements,” says Honor Jones, the lead of the North American Property Wholesale team at Miller Insurance Services.

“We are also seeing underwriters reducing line sizes on critical wind-exposed risks,” she added. 

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She goes on to note that underwriters’ focus on valuations is virtually universal, with those insureds unable or unwilling to demonstrate risks have been recently and independently appraised finding margin clauses are a standard requirement on both new and renewal business, with markets building in rate increases in excess of the above, where valuations are perceived as low.

The general property book excluding energy continues to focus on softer occupancies with CAT exposure in their profile including general real estate, however, will extend to food processing and light manufacturing. 

“Manufacturing can provide geographical diversity and we are seeing more success on middle market accounts of this nature currently,” added Jones.

The data states that the flow of new business from many regions of the US remains high with no sign of abating as we enter Q2.

Many American domestic carriers have continued to either withdraw or re-position their underwriting appetite, allowing London markets to determine terms and conditions, including on excess of loss layers which would not have been the case 12 months ago, said Jones. 

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