RPS on property condition and additional insurance markets in Q3 2024

Risk Placement Services (RPS) has released its market updates for the third quarter, providing insight into trends and developments in the property and umbrella/excess insurance sectors.

Property market overview

The excess and surplus (E&S) property market has seen significant change in the first half of 2024 compared to last year, according to RPS Area Executive Vice President James Rosey (pictured left above). Average rates for E&S properties have dropped from 5% to 12.5% ​​in many cases.

However, not all accounts or asset classes have experienced rate cuts or improved coverage.

In his report, Rosey noted that some carriers are moving away from accounts that are no longer compatible with their models or where opportunistic deals last year no longer justify rate cuts. Carriers are trying to strike a balance between disciplined underwriting and maintaining their market leadership.

Looking ahead, Rousey emphasized that not all accounts will see rate cuts or improved coverage. He indicated that nearly 80 percent of the businesses handled so far in 2024 have shown better results than in 2023, which is favorable for buyers.

These results are expected to allow carriers to remain profitable in the long run, even if adverse weather conditions arise. However, the remaining 20% ​​of deals are facing challenges, with rate increases linked to poor loss performance and market conditions where supply does not yet meet demand.

Rousey also said that a full-scale easing of the market is unlikely, even if the hurricane season is less severe. Carriers are using artificial intelligence, better data, and advanced underwriting models to make informed decisions about premium charges and when to drop certain risks. This disciplined behavior is expected to prevent significant bearishness in the market.

Umbrella / Additional Market Update

RPS Area Executive Vice President Russ Stein (pictured above right) reports that the current legal environment, coupled with rising medical costs, is leading to more complex and expensive claims in the mid-market business segment.

According to Stein, this has resulted in a steady migration from standard and package carriers, with a corresponding increase in business in the E&S market. Middle market insurers, who previously enjoyed lower premiums outside of the E&S market, now face pricing challenges and higher costs.

Stein also noted that auto insurance claims remain a significant issue, affecting capacity, attachment points, and pricing for excess and umbrella carriers.

An important topic in the current accident insurance market is the importance of submitting accurate and complete information. Stein emphasized the need for constant communication between insureds, agents, brokers and underwriters to develop highly competitive programs.

Given the constant legal challenges in the market, partnering with an accident site expert who can better understand the market dynamics and secure the best solutions for clients.

What are your thoughts on this story? Please feel free to share your comments below.