KBW Forecasts Decline In Specialty Reinsurer Loss Ratios
KBW Forecasts Decline In Specialty Reinsurer Loss Ratios
As they evaluate the market in the wake of Hurricane Ian and in the context of the adverse interest rate environment, analysts at KBW say they anticipate seeing a broad decrease in specialty reinsurers’ core loss ratios year-over-year.
ALSO, READ Argenta Breaks Down Lloyd’s Syndicate Forecasts
In light of the effects of these circumstances on numerous business lines, KBW anticipates some core margin volatility for many reinsurers due to significant property losses and changes in the business mix.
The company did add that many specialty lines outside of the catastrophe-exposed industry could still see declining loss ratios due to a lack of major loss activity.
This should help to hold down some core loss ratios more generally, it added, outside of the catastrophe losses from Ian and elsewhere.
KBW Forecasts Decline In Specialty Reinsurer Loss Ratios
Looking ahead to the 2023 renewals, KBW was also positive on the prospects for property catastrophe reinsurance pricing, saying that it expects to see “very optimistic commentary.”
Analysts believe that almost all underwriters, but especially reinsurers and auto insurers, will report significant catastrophe losses stemming primarily from Hurricane Ian, along with Hurricane Fiona, Typhoon Nanmadol, and other smaller losses.
ALSO, READ AM Best Revises Outlooks For Core Specialty’s Subsidiaries To Positive
For commercial lines insurers, they suggest most Q3 written rate increases should be flat or slightly lower sequentially, although premium increases should stay above underlying claim expense growth rates.
KBW analysts expect the biggest rate increases for cyber insurance and catastrophe-exposed property risks, with workers’ compensation rates flat or up modestly.
KBW Forecasts Decline In Specialty Reinsurer Loss Ratios
For personal lines, meanwhile, constrained marketing spending, accelerating earned rate increases, and decelerating used vehicle prices should start lowering core personal auto loss ratios.
ALSO, READ 2% Increase In Oil Prices As US Dollar Drops
Meanwhile, persistent commercial P&C rate increases and ongoing exposure unit growth sustain at least mid-single-digit organic revenue growth for brokers, KBW says.
AllInsuranceHUB is a blog for everyone who seeks an informative, educative, and knowledge-based online insurance and investment community. We share Biographies, Top-notch investment tips, finance news, insurance policy details and much more. You can read and share thoughts, ideas, and opinions on the finance market and get real-time updates from around the globe.
