A new analysis examining 2023 Property Insurance renewals signals a continued hard market for property and casualty insurers and brokers. The Commercial Property Update, an amendment to Alera Group’s 2023 Property and Casualty Market Outlook, focuses solely on Commercial Property Insurance and reflects market conditions exacerbated by Hurricane Ian, particularly in areas prone to catastrophic (CAT) weather events.
Key findings include:
- Most clients feel the impact, but higher-risk accounts bear the brunt. While most buyers are seeing rate increases with some reductions in the terms, high-risk clients are affected the most by price increases. This includes businesses with adverse loss histories, in CAT-prone areas or with frame construction.
- Inflation and supply chain delays push property value adjustments. A majority of clients' property values are significantly understated, with most in need of at least a 7.5% increase.
- Marketplace competition is minimal. Record losses and reductions in available reinsurance contracts are forcing insurers to cut back on the coverages they’re willing to offer, and to moderate the amount of new business coming in. Unlike problematic markets in the past, the industry is not seeing a significant influx of new capital now.
“Negotiations for the January 2023 reinsurance contracts were tough for insurers,” said Mark Englert, Executive Vice President and National Property and Casualty Leader at Alera Group, one of the nation’s top-ranked national insurance and wealth services firms. “Rising rates were met by an increase in attachment points for coverage and a rise in retention levels. With insights gained from January policy renewals, the Commercial Property Update provides analysis of the impact on Property Insurance from Hurricane Ian and offers new strategies for navigating the renewals.”
The Commercial Property Update and the full 2023 Property and Casualty Market Outlook are available for download. Contact a local Alera Group office or email email@example.com with questions and requests for assistance.