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Jun 17, 2020

State of the US insurance market by brokers AmWins and USI

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Two separate reports by US broker firms AmWins and USI covering the latest quarter's pricing and market conditions both provide very encouraging news on the momentum of price increases being experienced currently.

AmWins has commented on the main lines of business that they see, as follows:

Property – "We anticipate that Commercial Property rates will continue to increase between 10% and 25% year over year, depending on the level of CAT-exposure, and 30% or more if the account is CAT-exposed with losses."

Casualty – “In the Casualty space, capacity restrictions within the Excess sector are the most prominent. The trend of reduced capacity and increased rate started prior to the COVID-19 outbreak, but effects of the pandemic have added additional pressure to not only rate, but the terms carriers are willing to offer.”

Professional Lines
– "Regardless of whether the account is impacted by COVID-19, underwriters are tightening the reins across most lines of coverage in the Professional Lines sector as losses are expected. Insureds are seeing substantial rate increases with minimal ability to negotiate terms. Underwriters are asking many questions about how the insured is handling their business and workforce during the pandemic and reopening phases."

A copy of the AmWins report is available from their website - click here

AmWins is a global distributor of specialty insurance products and
services and is based in Charlotte, N.C., operating through more than
115 offices globally, handling premium placements in excess of $20
billion annually.

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Separately, USI's report "Commercial Property & Casualty Market Outlook" for Q2 2020, states "Tighter underwriting standards coupled with a continued exodus of capacity for certain classes of business and coverage lines have accelerated in the past 3-4 months. We do not see these trends abating in the near future; in fact, we anticipate they will remain throughout 2020 and into 2021.”

Their report also splits out the main classes and comments, as follows:

Property - "All segments of the property sector are experiencing higher rates, capacity restrictions/limitations, and other challenges resulting from a combination of factors that include carrier requirements and restrictions, excessive underwriting submissions, increased reinsurance costs, and COVID-19 claims and corresponding lawsuits."

Umbrella and excess liability – "The Umbrella/Excess lines experienced the most substantial firming during the first two quarters of 2020, with pricing increases of over 100%, reductions in total capacity of at least 25%, higher attachment point requirements, and further impact from "social inflation".

Casualty - "Rate increases, capacity restrictions and tighter underwriting standards are commonplace in the Primary General/Products Liability and other casualty markets, and it is anticipated COVID-19 will exacerbate the current market dynamics across all lines including Workers' Compensation."

Directors and officers (D&O) – "Both the public company D&O marketplace and the private company Not-for-Profit D&O marketplace continue to experience premium and retention increases with COVID-19 hastening the pace. The increases are not as severe within the private market but are higher than they were in Q4."


A copy of their report is available from their website - click here.

USI is one of the largest insurance brokerage and consulting firms in
the world, delivering property and casualty, employee benefits, personal
risk, program and retirement solutions and is based in New York.

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These are helpful reports that confirm the sizeable rate increases being imposed upon US insureds following the recent turn to a hard market necessitated by COVID-19. Reinsurance costs that insureds have to pay in order to obtain natural catastrophe coverage is also driving pricing.

Hampden Underwriting Research (HUR) will be producing a Market Update later this month for Hampden clients covering the whole market.

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Alistair Wood of HUR will be recording a podcast on the latest 2018 and 2019 estimates to be uploaded to our website as soon as possible.