Current state of the P&C market

[T-bone1]

There has  been a lot of talk P&C premiums firming up and AIG no longer dragging down the industry with irrational pricing. 

 

Richard Brindle, CEO of Lancashire, would beg to differ:

 

"The head of Lancashire said he was baffled by rivals’ claims that insurance premiums were on the rise in recent months, as he indicated the company had become fed up with weak prices in important areas.

 

Richard Brindle, chief executive of the Lloyd’s of London insurer, said the company had withdrawn from commercial property and onshore energy insurance because it was concerned about unpredictable losses and “depressed” premiums."

 

article here: http://www.ft.com/intl/cms/s/0/63ada3ce-d640-11e1-ba60-00144feabdc0.html#axzz21jatm7sV

 

I am curious what other data points people on this board see, and how others see this playing out.  Bond yields continue to fall and the hard market continues to be pushed out into the future as far as I can tell. 

 

I have little doubt that FFH, LRE, WRB and the rest of the more rational players will eventually have an opportunity to pick up the pieces when the industry does finally take a big hit - a hit that I think is just as likely to come from the bond market as it is from the weather.

 

Are some of you more constructive on the current P&C market?  Do people think there is huge capital waiting in the wings from Bermuda reinsurance subs set up by financial companies?  Will this drag out the cycle?

 

I know a lot of people on this board are much more familiar with some of these issues than I am and would appreciate their insight.  thanks!

[PlanMaestro]

My understanding is that the US prices are the ones recovering, and that might match the AIG story because that is where AIG has been cutting business.

 

http://www.towerswatson.com/research/2888

http://www.towerswatson.com/assets/pdf/mailings/January-2012-PC-Insights.pdf

[PlanMaestro]

Marsh, Global Insurance Market Quarterly Briefing — October 2012

(free registration)

 

http://usa.marsh.com/Portals/9/Documents/4248-NCN-IMR-Q3Briefing_09-2012.pdf

 

Global insurance prices continued to rise in the third quarter of 2012, but showed signs of stabilizing. The cost of insurance across major lines increased by 0.9% over the second quarter, according to the Marsh Risk Management Global Insurance Index (see Figure 1).

 

Also in the third quarter, figures showing the typical renewal rate changes suggest that increases, although varying across lines of business, may be stabilizing (see Figure 2). Renewal rates increased by 1.4% in the third quarter, the same level of increase as seen in the second quarter.

 

 

[nwoodman]

Market Scout believes pricing grew a little faster, with P&C rate increases on average up 5% for September

 

MarketScout's CEO, Richard Kerr, noted, "The more premium a buyer pays, the more competitive the rates. Smaller and middle market accounts ($0 to $250,000 in premium) paid an average rate increase of 6 percent in September. Large accounts ($250,000 to $1,000,000) paid a rate increase of 4 percent and jumbo accounts (over $1,000,000) paid only a 3 percent rate increase."

 

http://www.marketscout.com/frontend/barometer_mar.asp

[PlanMaestro]

Market Scout believes pricing grew a little faster, with P&C rate increases on average up 5% for September

 

MarketScout's CEO, Richard Kerr, noted, "The more premium a buyer pays, the more competitive the rates. Smaller and middle market accounts ($0 to $250,000 in premium) paid an average rate increase of 6 percent in September. Large accounts ($250,000 to $1,000,000) paid a rate increase of 4 percent and jumbo accounts (over $1,000,000) paid only a 3 percent rate increase."

 

http://www.marketscout.com/frontend/barometer_mar.asp

 

That's year over year, the previous one was quarter over quarter.

[nwoodman]

That's year over year, the previous one was quarter over quarter.

 

Thanks, I should have picked that up

[Liberty]

Anyone has been following Bill Berkley lately? I haven't in a while, but last year he was predicting a hardening of the market. I wonder what he has to say about the current situation..

[beerbaron]

Look at their webcast. He still uses the same updated chart showing redundancies VS rates. He seems right based on the graph.

 

BeerBaron