Soft Market Is Ending, Really It Is, Says SNL Financial- (from the Insurance Journal)
Could the soft market finally be over? A new analysis concludes that insurance prices are rising and the prolonged soft market is ending, contrary to earlier reports from other analysts.
Virginia-based SNL Financial says personal lines pricing is definitely hardening and commercial lines is moving in that direction such that premium increases can be expected in the coming quarters.
U.S. property/casualty industry premiums in the fourth quarter grew at their fastest rate since 2006 in response to underwriting losses, unfavorable reserve development and an improving economy, Jon Wright, SNL Financial’s director of insurance, said in an interview with Insurance Journal.
This means buyers could see higher premiums as 2011 continues, particularly in business lines like personal auto and homeowners insurance, said Wright.
The commercial lines segment is also coming out of its pricing slump, according to the SNL analyst.
“For commercial lines, what we’re seeing is we’re still seeing declines in premiums year-over-year, but what we’re looking at is a point and a half whereas a year ago we might have been seeing nine, 10 percent decline year-over-year. What we’re seeing is moving along that curve to where we should see flat to increases over the next several quarters,” Wright said.
After analyzing data for 95 percent of the industry, SNL Financial found that the U.S. insurance industry’s negative returns on underwriting continue to deepen and the short-term boost from over-reserving for prior years is running out.
Read the rest here: http://www.insurancejournal.com/news/national/2011/03/10/189761.htm