The property market remains in a delicate state, although a general softening trend is evident, Amwins’ analysts have stated in its latest State of the Market Report
This year has seen a series of significant weather events, with Hurricanes Helene and Milton causing substantial property damage. Helene, primarily an inland flood event, led to estimated losses of $6B to $12B, while Milton, a wind-focused event, caused losses ranging from $15B to $30B.
Despite these events, the influx of new capacity into the property market has driven increased flexibility in pricing and appetites among existing carriers.
Helene’s impact was particularly severe in North Carolina, a state that is not traditionally considered a hurricane impact zone.
The Insurance Information Institute has estimated that only 1% of homeowners in NC who sustained flooding from Helene were insured.
As a result, the low flood insurance rates are expected to shift the financial burden largely onto state and local governments.
Milton, initially projected to hit Tampa, ultimately made landfall in a less populated area, avoiding becoming one of the worst CAT events in US history, analysts noted.
While a significant event, Milton is anticipated to primarily affect homeowners’ insurance and serve “as a reinsurance event for Florida domestics but overall will not affect the balance sheets of most reinsurers.”
The overall softening trend in the property market continues despite pending losses from the Hurricanes and other named severe convective storms (SCS), with new capacity driving competition and increased line sizes from carriers.
Rates remain softer on the East Coast than the West, as well as for insureds with large total insured values (TIV). However, analysts expect smaller TIV accounts to continue to experience hardening market conditions.
The report stated that the combined impact of Helene and Milton may influence the market in 2025, yet is still too early to be certain of the exact impact.
Currently, Amwin views the 2024 hurricane season as an earnings event rather than a significant threat to carrier balance sheets.
Regarding the London property market, it has retained its relevance across both primary and excess layers, with no indication of diminishing appetite for new opportunities in 2025.
The market has experienced a profitable year, and despite the pricing peak having passed, underwriters perceive adequate margins to maintain profitability.
After many years of hardening timer, the rating environment has become more favorable for clients, particularly those not impacted by the recent hurricanes, the report also noted.
Although it is still too early to evaluate how the reinsurance market will react at the end of year renewals, analysts expect any savings achieved in the January 1, 2025 reinsurance renewals to be passed onto clients by primary carriers.
London anticipates continued growth in 2025, particularly if terms and conditions remain relatively favorable. The focus would be on premium savings and potential adjustments to sublimits and coverages.
Amwins report also highlighted that current conditions are putting pressure on the Bermuda market. In 2024, Bermuda carriers have generally quoted flat to 5%-10% rate decreases, with many accounts seeing flat premium renewals despite increased TIV.
Distressed accounts, however, have experienced rate increases to ensure adequacy.
Bermuda has found success with CAT driven placements that are being restructured or has experienced year-over-year growth. The impact of Helene and Milton on Bermuda underwriters’ books has not been significant, the report concluded.
