Real estate markets will remain tight without softening in the foreseeable future, while primary casualty renewals will remain largely unchanged except for challenged classes such as heavy auto exposure and trucking, according to a report Wednesday from Amwins Group Inc.
However, due to the challenges in the property market, reinsurers are being “extremely cautious” with all their capacity, which could negatively impact casualty markets further into 2023, Amwins said.
The excess casualty sector continues to see “moderate” rate increases ranging from flat to 15%, depending on account size, losses and risk exposure, but without the uproar of two years ago with insurers “hinting”; at expanding limit offerings, Amwins said.
Real estate markets continue to be plagued by natural disasters, with Amwins noting the combined effects of a major hurricane making landfall in the US in five of the past six years, wildfires consuming thousands of acres, unprecedented winter storms and flooding in the Midwest. All “have played an important role in hardening the insurance market.”
Insurers are therefore expected to offer less capacity and higher deductibles “in an effort to manage their portfolio aggregates as well as concentrate on profitability,” Amwins said.
Professional lines have been relatively stable with speed increases slowing overall, the report said.
Reinsurance markets also saw challenging conditions, Amwins said. January 1 renewals for “were as difficult as predicted” with capacity tightening across the board along with increases in speed, retention and net retentions throughout program structures, as well as more restrictive terms. “Most program structures now look completely different than they have in previous years,” Amwins said.