Chief financial officers, risk managers, and other commercial insurance decision makers face a tougher pricing environment in the coming months in the property and casualty insurance market, according to the latest Lockton Market Update.
Prices for many risks are flat, and commercial insurance buyers face tougher underwriting and rising prices in many markets. The new package of market updates from insurance broker Lockton outlines the market dynamics and approaches to mitigate insurance cost increases.
Casualty Insurance Market
“Although casualty insurance capacity is still strong, its impact on pricing continues to fade,” Lockton casualty experts Jesse Olsen and Stacy Seaberg say. “Instead, carriers are focused on return on capital.” Many insurance carriers are attempting to raise prices and stiffen underwriting guidelines to increase returns to stakeholders, meaning tougher renewal conversations for insurance buyers.
Commercial Property Insurance Market
Lockton’s Jim Rubel writes that the commercial property market is not yet hard, where capacity is not available at any price. “However, it has become a very difficult market for buyers of property-catastrophe insurance—a market where capacity is available, but only at a price.”
Rubel says insurance buyers who begin the renewal process early and provide underwriters with plenty of detailed information will be in a position to minimize the potential for significant price increases.