Insurance brokers are using many terms to describe the commercial insurance market's current condition, but unless you're placing a property risk sitting in a catastrophe zone, “hard” is not one of them. Still, the absence of a major disaster so far this year–coupled with higher prices for property-catastrophe risk–is liable to result in sky-high insurer profits, likely prompting increased competition among insurers in the year ahead, producers say.
Even worse–for sellers, not buyers–not satisfied with competing against one another, the appetite of standard lines carriers is growing to include markets they had shied away from, brokers suggest.
However, with capital allocation still relatively tight (especially on the reinsurance side), as well as serious concern that Washington will allow the federal terrorism reinsurance backstop to expire next year, some say prices could rise and coverage tighten up for certain lines and accounts. And any market softening will be brief if Mother Nature unleashes another major catastrophe, or terrorists strike again, producers warn.
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