Industry experts have been speculating about a turn in insurance pricing for quite a while (see older commentary here, here and our prior post), but are we actually getting close? Some very impressive experts are saying so. Not right now, but over the next couple of years.
The first is Alirt Research, an insurance analyst firm focused on the insurance business. As noted on PropertyCasualty360 (see here), Alirt believes a turn is on its way, but not for a year or two:
[The hard market] is definitely coming, but maybe not as fast as some people would think
Additionally, Robert Hartwig, President of the Insurance Information Institute (I.I.I.), sees a gradual turn starting to show (see here & here):
Prices are beginning to firm in the sense that insurers are not granting dramatic decreases on the businesses they write. Over the next two to three years, rates will move up gradually as carriers flee inadequately underwritten business and work to replace their reserves
Bill Berkley, Chairman and CEO of W.R. Berkley Corp., is also expecting a tightening of pricing (see here) from a change in mind set:
One of the primary drivers of the new market direction will be the realization that pricing cannot continue in the direction it has been and needs to change. Whether it will be a single dramatic event, the eventual realization that reserves are inadequate or an increase in reinsurance rates, there will be a mind change that will precipitate a change in market direction.
Note – the insurance industry is cyclical, ranging from “soft” to “hard” (see here).
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I've already noticed a couple of companies increasing their rates.
Posted by: Nick | September 23, 2011 at 11:43 AM
How about health insurance? Will there be a market turn as well?
Posted by: 457 Health Insurance | July 20, 2011 at 03:27 AM
Thank you for this informative post, I just discovered the Insurance Information Institute.
Posted by: Critical Illness Insurance Information | June 01, 2011 at 03:09 PM
good post
Posted by: Jason Martin | May 01, 2011 at 01:50 PM
Just wondering, how long do you think the hard market will last?
Posted by: Professional Indemnity Insurance | April 27, 2011 at 03:55 PM
good text..thank you..
Posted by: sapanca sigorta | April 27, 2011 at 04:57 AM