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

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

The broker highlights Fitch Ratings’ prediction for modest underwriting improvements in 2024 following poor auto insurance results and catastrophe losses in 2023. Early signs of market stabilisation were also evident in the Council of Insurance Agents & Brokers’ (CIAB) Q1 2024 Commercial Property & Casualty Market Report.

The report shows a moderation in premium increases across various business lines, with an average rise of 7.7 percent in Q1 2024, up slightly from 7.0 percent in the previous quarter.

Small and large account premiums grew by 7.3 percent, while medium-sized accounts saw the highest increase at 8.5 percent for the fourth consecutive quarter. Commercial auto premiums rose by 9.8 percent, up from 7.3 percent in Q4 2023, marking the second-highest increase among all lines.

The broker highlights that the reinsurance renewal seasons in January and April for property insurance were more organised, with reinsurers cautiously expanding their capacities after a challenging 2023. Improved property valuations, supported by appraisals and documentation, have better positioned most insureds.

Premium trends have moderated for insureds who have accurately insured to true replacement cost value over the past two years. Despite ongoing premium increases due to exposure and rate growth, Q1 Property rates rose by 10.1 percent, general liability premiums by 4.1 percent, and umbrella/excess premiums by 7 percent.

The cyber insurance market continued to stabilise, bolstered by strong underwriting and robust cybersecurity measures, though systemic risks remain a concern.

Directors & Officers (D&O) insurance premiums stayed flat, with ample capacity fostering market competition. Workers’ compensation premiums also remained flat and competitive in 2024.

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