Commercial insurance prices are accelerating as US real estate / accident insurance companies are hit by a pandemic and disaster headwinds are trying to compensate for rising loss costs and low interest rates, Moody & # 39 ;s Investors Service Inc. said in a report on Thursday. 10% on average, with about 83% of the commercial line market – which reported $ 169 billion in direct premiums in the first half of 2020 – saw increases, Moody & # 39 ;s said in the report.
"We expect price increases to continue until 2021 based on continued negative loss cost trends and low market interest rates," said Moody & # 39; s.
Commercial insurance prices were priced even before the coronavirus pandemic began except in labor compensation, according to the report. first nine months of 2020, especially in general liability, commercial real estate, professional liability and commercial car, "rep Ort said.
Pricing is also increasing significantly in surplus and surplus lines, where several years of loss of property disasters and increasing severity in accidents have caused insurers to go down, said Moody & # 39; s.
Commercial real estate insurance companies are also raising interest rates in response to the high frequency and severity of catastrophic events and rising reinsurance costs, said Moody & # 39; s.
US Outlook property / accident insurance sector rn for 2021
"For commercial line insurance companies, the coronavirus-related economic downturn is limiting premium growth, raising claims costs in certain business areas and adding volatility to investment performance and capital levels," Moody & # 39 ;s Vice President Jasper Cooper said in a statement.
“While the economic recovery is underway, our macro forecast underlines the downside risks. In addition, low interest rates are likely to remain for a longer period of time, reducing insurers' investment income and weighing profitability.