Willis Chairman and CEO Joe Plumeri sees "smaller, localized waves" replacing the the "rising tide that lifts all boats" when it comes to the insurance-pricing cycle. Willis sees a leveling off in commercial-property pricing in 2013, while casualty risks will likely see more increases.
Two recent reports by the same analyst firm illustrate the unpredictability of the insurance-pricing cycle, as one report notes industry reserves are approaching inadequacy, while the other states that property-catastrophe rate increases, which had led the charge out of the soft market, appear to be slowing.
After suffering through a year of elevated property losses and poor underwriting results in 2011, U.S. commercial-lines insurers are positioned to deliver improved operating results this yearbut carriers will still struggle to reach previous profit marks, one analyst says.
As a further sign the insurance-pricing cycle is beginning to shift, Moodys Investors Service says some companies are reporting strong growth in excess and surplus lines business, generally a sign that standard-market carriers are tightening underwriting and shedding business.
Nearly all risk managers (96 percent) have significant concerns about the availability and pricing of coverage, according to a survey of member firms of The Independentsan international coalition of insurance brokers and risk-management-services firms.
Risk managers and financial executives who are facing property renewals have significant concerns about the availability and pricing of coverage, according to a global survey.
Airline insurance claims dropped 66 percent below 2010s loss numbers, and pricing in the marketplace exhibited stability through the 2011-2012 renewal period, says insurance broker Aon.
The airline-insurance industry should be profitable this year if there are no major losses. Additionally, soft-market pricing and ample capacity should continue into 2012, according to Aon Risk Solutions.
Insurance-company executives, a global broker and analyst firms are weighing in on whether the market is hardeningand their responses include yes, maybe, and a debate over whether the traditional hard- and soft-market cycles are even relevant anymore in the marketplace.