Commercial insurance pricing is impacted by the property damage reinsurance market

According to Goldman Sachs, a market for property catastrophe reinsurance should affect the pricing of commercial lines of insurance.

The company said that with the latest gradual inflation, real estate business prices should stop slowing or potentially start accelerating again, as they have started to see evidence of this in the latest price surveys from Ivans & Marketscout. .

He expects business prices to continue to show a modest deceleration with the possibility of prices being more stable QoQ as inflation impacts real estate business sectors.

Ultimately, Goldman Sachs experts believe there will start to be some divergence between lines like commercial real estate and commercial auto where there is likely to be a temporary reacceleration in the rate, especially given the hardening of the reinsurance markets for real estate cats.

Goldman Sachs said: “Overall, we expect for most companies price will still be somewhat above loss cost trends, although some will likely start to see this momentum move towards pricing more in line with cost. loss, as we saw at TRV last quarter. ”

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E&S lines will also be affected by the hardening of the property and casualty reinsurance market.

According to the firm – based on information suggested by data from stamping offices in California and Texas – there could be more acceleration in the QoQ rate, compared to the slowdown expected in standard lines.

Goldman Sachs said: “We view this as being related to the property portion of these premiums being higher risk and seeing larger increases as the property reinsurance market for cats has tightened. .”

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