The good news for insurance companies is that, in general, rate increases may have outpaced loss trends in this year's third quarter. But the benefits to carriers may be offset by growing reserve pressures and the continued "slow-motion collapse" of investment income, according to new analysis by Keefe, Bruyette & Woods.
In its third-quarter earnings preview for the P&C industry (titled "Better Than Feared"), KBW forecasts commercial-lines insurers will report rate increases in the 6-7 percent range, while personal-lines insurers are expected to show increases in the 2-3 percent range. For reinsurers, KBW expects Jan. 1 renewals to be generally flat, including those in catastrophe lines.
"One potentially bullish point for the sector could be signs that the pricing improvements have outpaced loss trends, with the benefit falling to the bottom line," the report contends, but KBW notes that "the math is more complicated," as it outlines headwinds insurers face as they prepare to release Q3 results.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
