P&C sector reports improving conditions in early 2024: McGriff

The Property & Casualty (P&C) industry started 2024 in a stronger position compared to 2023, thanks to 25 consecutive quarters of premium increases, improved investment returns for insurers and a relatively mild hurricane season, broker McGriff highlights in a recent report.

The broker highlights Fitch Ratings’ forecast of moderate improvement in the insurance landscape in 2024 due to weak motor insurance performance and catastrophe losses in 2023. Early signs of market stabilization were also visible in the Insurance Agents and Brokers Council (CIAB) report for the first Quarter 2024 Commercial & Casualty Property Market Report.

The report shows moderate premium increases across business lines, with an average increase of 7.7% in the first quarter of 2024, a slight increase from 7.0% in the previous quarter.

Premiums for small and large accounts increased by 7.3 percent, while for medium accounts, for the fourth quarter in a row, the highest increase was 8.5 percent. Commercial auto premiums increased 9.8%, up from 7.3% in the fourth quarter of 2023, the second-highest increase among all lines.

The broker highlights that the January and April reinsurance renewal seasons for non-life insurance were better organised, with reinsurers cautiously expanding their capacity after a difficult 2023. Better property valuations, supported by valuations and documentation, ensured a better position for most policyholders.

Premium trends have softened for policyholders who have thoroughly insured to their actual replacement cost value over the past two years. Despite continued premium increases due to increases in exposures and rates, first quarter property rates increased 10.1 percent, general liability premiums increased 4.1 percent and umbrella/excess premiums increased 7 percent.

The cyber insurance market continued to stabilize, supported by strong underwriting and robust cybersecurity measures, although systemic risk remains a concern.

Directors’ and Officers’ (D&O) insurance premiums remained unchanged, and ample capacity encouraged competition in the market. Workers’ compensation premiums also remain unchanged and competitive in 2024.