Prices are holding steady for corporate buyers of casualty insurance products, and in cases where the loss experience has been particularly good, the premiums have fallen. On the property insurance side of the industry, it’s a buyer’s market, with prices falling at a quick clip. And in both industry houses, insurers eager to maintain market share are open to altering policy coverage terms and conditions.
These are just some of the enticing tidbits risk managers can anticipate as they head into the annual April policy renewal season. While not all companies renew their policies in the springtime, most do. Unlike past market encounters, this go-round promises good deals along with the sunshine and flowers.
Other factors influencing the softer market include the improving economy and rising investment income yields, although the observers discount both. “The economy is certainly helping, but no one would have a parade over how well it is doing,” Keeping says. “And investment income just isn’t playing as much of a role as in previous insurance cycles. The focus instead is on growing profits through improved underwriting data and actuarial analyses.”
Kempsey shares this view. “More clients are using data analytics and not just on the property side,” he said. “Our global analytics team has developed a cutting-edge tool for risk financing optimization that helps companies structure insurance programs in the most economically efficient manner, while meeting the organization’s risk tolerance goals.” He adds that the tool can tell companies if their financial limits of protection are appropriate, too high or too low.