Insurance buyers seeking windstorm coverage for their properties may increase rate – some in the low double-digit range – when they go to market ahead of the 2019 storm season, even if they haven't suffered catastrophic claims, according to brokers
The 2019 season hurricane officially starts Saturday, and NOAA is projecting between nine to 15 named storms, or which four to eight could become hurricanes, including two to four major hurricanes, defined as Category 3, 4 or 5.  "The wind market is challenging," said Rick Miller, US property practice leader in Boston for Aon PLC. "If you have a wind-exposed account, there is going to be rate pressure, no question."
The market did not experience a large uptick in rates in the immediate aftermath of the 201
Rate hikes are "increasing in velocity," said Duncan Ellis , US New York Marsh LLC property practice leader
"The market had a little bit of a slow burn," Mr. Miller said. "2017 was a really tough year. Everyone expected there to be an immediate reaction and while there was pressure last year it was not as significant as some thought it might have been. But (it has) continued into this year. ”Ratings pressure“ has gotten more acute ”and underwriters have been pushing a little harder in the second quarter, he added.
Increases have been“ highly discriminating ”and vary widely depending on exposures and loss history, with the market not lumping together and looking for a consistent increase, Marchitello said, "They're not using a broad brush," he said.
Ellis said. "It's really been focused on the market as a whole, so good accounts are seeing rate uplifts, not to the degree of problem accounts, but rate uplifts are happening across the board now," after several years of "unsustainable" rate softness, he said.
Minimum increments for catastrophe-exposed properties are on the order of 10%, "and it escalates from there," Mr. Marchitello said: Catastrophe exposed insureds with previous losses could see increases of as much as 15% to 20%, he said.
A snapshot of the market in the first half of the second quarter shows low double-digit increases, Mr. Miller said "We're seeing it now between 15% and 20% on average."
Accounts with troubled loss ratios may see more severe increases and those with loss ratios over 100% could see increases as large as 30%, Catastrophe exposed portfolios with good losses "are probably in the 20% -ish range."
Terms and conditions are much more scrutinized than they had previously been, with pressure on certain deductibles, added.  For hurricane risks in coastal areas, it is common to have a percentage of deductible on coverage, typically on the order of 3% to 5%, according to Mr. Marchitello
Some of those deductibles had slid to the lower end of that range and even to 2% over the past few years had rates been soft, he said, and in some cases fixed dollar caps were instituted. There is now a "widespread push" to do away with the dollar caps and push deductibles back to the higher end of the range, he said.
Although a majority of Marsh's clients saw rate increases during the first quarter, some clients did experience rate decreases, but the ratio of increases to decreases has been inverted compared to the softer markets of recent years, Mr. Ellis said.
Clients are also more integrated and playing a more proactive role in trying to manage risk exposures as rates climb, sources said. Miller said, "They understand the tools better."
"There is a general recognition that you really have an accurate forecast of what your loss could be, then you have to collect the data," Mr. Marchitello said. "After you have collected the data, updating is pretty easy from year to year.
Quality is the key to achieving the best results upon renewal.
The more sophisticated buyers definitely understand the metrics and how important their own data is, ”Mr. Miller said,
"The better the data you provide, typically the better result you will get," Mr. Marchitello said.
"Risk differentiation is definitely front and center," Mr. Ellis said. Those risks and accounts which seek to manage better and improve their risk profile are definitely seeing better results both from a pricing and capacity point of view. ”