There is near universal agreement that carriers are achieving rate increases for property and casualty business, but analysts and company and brokerage executives struggle to say what can be expected over the long term as the industry appears to be in new territory from a pricing cycle standpoint.
J. Patrick Gallagher, president and CEO of brokerage Arthur J. Gallagher, said at yesterday’s Keefe, Bruyette & Woods Insurance Conference in New York that the current rate environment is unique relative to the prior three market cycles he has seen. Rates are beginning to firm, he notes, but the industry is not seeing the “spike recovery” in rates typical of a hard-market turn.
He outlined his company’s strategy of growing the most when the market is on its way up, and letting business go when prices start to decline.
When W.R. Berkley released its second-quarter results, Berkley said at the time that he believes rates will continue to see upward pressure as companies begin to realize their weakening loss-reserve positions.