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What will be the average percentage change in property and casualty insurance premiums in Q1 2021?
Context
The property and casualty insurance market is a $1.6 trillion industry, and according to McKinsey, “remains one of the few industries that has yet to be disrupted.” P&C insurance premiums represent an important metric for business owners as they plan for the cost of protecting their businesses from risk. According to the National Association of Insurance Commissioners:
Soft market conditions have gripped the U.S. property and casualty insurance industry since 2007. Some characteristics of a soft market are flat or declining rates, more relaxed underwriting standards, and increased competition among insurers.
Following the industry’s 2017 highest-ever losses, predominantly caused by a catastrophic increase in climate related incidents such as wildfires, flooding, and the hurricane season, the P&C insurance market saw a 49.5% net income increase in 2018, followed by a 7.9% net income increase in 2019.
According to the Council of Insurance Agents & Brokers:
Premium pricing increased an average of 3.5 percent in Q1 2019, compared to 2.4 percent in Q4 2018 and 1.6 percent in Q3 2018.
The same report identifies the highest premium increase in the last 10 years as 28.5% in Q4 of 2001.
COVID-19 appears to be precipitating a hardening of the market, and CIAB reports that premium prices across all-sized accounts increased by an average of 9.6% in Q1 2020, representing the 10th consecutive quarter of premium increases.
Question
What will be the average percentage change in property and casualty insurance premiums in Q1 2021?
Resolution
This question will resolve according to CIAB’s Quarterly Market Outlook report for Q1 2021.
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