Menu

Reinsurance News

P&C rates up 9.6% amid pandemic: CIAB

29th May 2020 - Author: Matt Sheehan

A new survey from the Council of Insurance Agents & Brokers (CIAB) has found that property and casualty (P&C) premium prices increased by an average of 9.6% in Q1 2020, as the COVID-19 pandemic puts further strain on the market.

industry-growth-graphThe figure compares to an average increase of 7.5% in Q4 2019, with survey respondents reporting moderate to significant pricing increases for all account sizes and all lines of business with the exception of workers’ compensation.

Hardening last quarter mostly impacted large accounts, whose premium prices increased by an average of 12.6%, followed by medium accounts with an average premium increase of 9.8%.

Small accounts were impacted less than the other account sizes, with an average premium increase of 5.5%.

Commercial lines also experienced notable hardening, with an average price increase of 8.7%, compared to 7.6% in Q4 2019.

Umbrella pricing increased the most this quarter, up 17.3%, followed by Commercial Property at 12.0%. Commercial Auto prices also continued their climb upward with the 35th consecutive quarter of increases, at an average of 9.6%.

“We are now in the midst of a hard market, premium increased steadily for 10 consecutive quarters,” said Ken A. Crerar, President/CEO of CIAB. “Umbrella, Commercial Property and Commercial Auto were the hardest hit, with Umbrella and Commercial Property seeing double digit increases—the largest since 9/11.

“Additionally, the uncertainty around COVID-19 put additional strain on the industry in the latter-half of March. Respondents noted the current pandemic affected carriers’ ability to collect premium and the availability of coverage by the end of Q1.”

Though respondents noted that COVID-19 only really began to impact the industry in the latter half of March, effects were pronounced, with business interruption (BI) seeing a significant shift in demand and claim activity.

The percentage of respondents reporting an increase in demand for BI rose from 18% in Q4 2019 to 47% in Q1 2020, while the percentage of respondents reporting an increase in claims for BI jumped from 18% to 75%.

Underwriting capacity also decreased for lines including Umbrella, Commercial Property, Commercial Auto, and D&O, all of which experienced significant premium increases.

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
$13bn insured loss from 2020 US severe convective storms: Aon

Global reinsurance broker Aon has pegged the insured loss in 2020 from US severe convective storm damage at $13 billion....

Close