After several years of declines, casualty reinsurance premiums bucked the recent trend in 2018, and going into 2019, continued, modest increases are expected in primary casualty reinsurance, according to AmWINS.
According to the global specialty insurance provider, rate increases in casualty reinsurance are being driven by a number of factors. This includes the efforts taken by the specialist Lloyd’s of London insurance and reinsurance marketplace to improve the performance of its syndicates.
AmWINS states that with the Lloyd’s market expected to reduce its gross written premiums in 2019 by roughly 5%, as it looks to eradicate underperforming business in a challenging market, “we anticipate long-term improvement in underwriting results but higher rates in the near term.”
Commenting on the London casualty market, AmWINS’ executive vice president and national casualty practice leader, Tom Dillon, said: “We have already seen some London markets pull out of U.S. construction, but there is still ample capacity available.”
Looking at the broader casualty arena, and AmWINS warns of a market rife with contradictions.
“On one hand, we have markets exiting, constricted capacity, rate increases, and restricted terms and conditions for problem areas such as primary casualty in Florida, much of the transportation sector, and New York Construction. On the other hand, we have new entrants, increased capacity, competitive pricing and terms in lessors-risk, the sharing economy, and liability coverage for cannabis producers.”
Regarding real estate, the insurer warns of competition for lessors-risk business, while habitational business remains problematic. For automobile liability, AmWINS says that both brokers and buyers are presented with a familiar scenario in 2019, of increasing rates and continued market constriction.
Interestingly, the firm states that it does not anticipate any carriers to either enter or exit the energy arena.