Filed Under:Agent Broker, Sales & Marketing

Prices are rising and underwriting is tightening, PIA survey shows

Insurance prices are rising while underwriting is tightening, according to an annual survey of agents in New York, New Jersey, Connecticut and New Hampshire. (Photo: iStock)
Insurance prices are rising while underwriting is tightening, according to an annual survey of agents in New York, New Jersey, Connecticut and New Hampshire. (Photo: iStock)

The Professional Insurance Agents of Connecticut, New Hampshire, New Jersey and New York State (PIA) has released the findings of its annual Market Trends Survey, conducted through January 2016.

The survey asked producers in the four PIA-affiliate states if their clients are experiencing increases or decreases on various lines of business (personal auto, homeowners, commercial property, and commercial liability) and whether their carriers’ underwriting guidelines are tightening or relaxing over the past year.

Respondents told PIA that prices are rising, while underwriting continues to tighten — results that are consistent with the findings of the past four years. However, the extent to which respondents in the survey say they are experiencing this rise seems to have relented somewhat, PIA found.

Key findings

  • Underwriting guidelines and changes. When asked, “To what extent are underwriting guidelines becoming more strict,” 32% of respondents indicated a “moderate change” in the underwriting approach to Homeowners', reflecting a downward shift from 34% in 2015. When asked about whether they’ve experienced a significant change, 13% of respondents said “yes,” compared with 36% last year. 

    For both personal and commercial business, 56% of respondents reported minor to moderate changes in underwriting in this year’s survey. This reflects a decrease from last year, PIA observed, when 61% of respondents indicated “moderate to significant” changes.
  • Pricing. A similar trend was reflected in pricing, the survey found. When asked about Homeowners' rates, 85% of respondents said rates have increased over the past year, down from 91% who reported an increase in 2015.
  • Non-renewals. Regarding non-renewals, 80% of respondents said they’ve experienced no, or minor, increases in non-renewals in both personal- and commercial-lines policies, compared with a majority (63%) who reported minor to moderate increases in non-renewals last year. Half of the of respondents (50%)reported no change in non-renewals for personal auto in this year’s survey.
  • Market conditions. Additional findings from the survey also indicate a moderation in market conditions. For example, 39% of respondents reported placing less than 5% of their business through wholesalers, and 82% of respondents said they have increased their marketing efforts over the last year.

About 200 agents participated in the survey, which has been conducted every year since 2012, after a renovation from the associations’ original “Hard Market Survey” of the early 2000s.

PIACT, PIANH, PIANJ and PIANY are trade associations representing professional, independent insurance agencies, brokerages and their employees throughout their respective states.

Related: 10 trends to affect the insurance marketplace in 2016

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