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The Council’s Q2 2023 P/C Market Survey Reveals Growing Fatigue Among Insureds Due to High Rate Increases, Demanding Renewals
WASHINGTON, D.C. – Premium increases remained stable in Q2 2023, with an average increase of 8.9% across all account sizes, up slightly from the previous quarter’s 8.8%. This marked the 23rd consecutive quarter of increases.
Similarly, most lines of business recorded increases roughly comparable to or slightly higher than Q1. Cyber was a notable exception to this. Respondents reported an average increase of 3.6% for this line, down from 8.4%, one of the strongest signs of relief seen so far for cyber. In line with that, 40% of respondents also noted an increase in underwriting capacity, up from the previous quarter during which 30% reported an increase, suggesting more carrier appetite for the line.
Commercial property was also a standout. Premiums climbed by 18.3% in Q2 2023, the highest out of all lines of business. Respondents suggested natural catastrophe losses were one of the main contributors to high premiums, high deductibles, and reduced limits—losses likely partially stemming from the recent series of severe thunderstorms in the U.S., which caused around $34 billion in insured losses in just the first six months of 2023, according to Swiss Re. Coastal property was also hit hard, with several respondents mentioning that it was “very difficult to insure in the standard markets.”
Difficulties with reinsurance also compounded existing issues with this line. Multiple respondents described carriers either cutting capacity or non-renewing existing accounts altogether due to how challenging it was to find reinsurance capacity.
Top priorities for brokers this quarter centered on enhancing the customer experience. Two crucial parts of achieving that goal depended on both becoming more data-driven and adopting new technology. Leveraging technology can in turn allow brokers to get better and more accurate information in front of respondents, as well as enable firms to develop unique offerings more suited to respondent needs and inform risk strategies using that same wealth of data.
Recruiting and developing talent remained the top challenge for brokers this quarter. Some respondents said they had found success in solving this challenge by looking outside the insurance industry and prioritizing employees that fit their culture over those with previous industry experience, and by willing to be flexible when it came to work hours and work location in order to attract the best employees.