The march off the cliff has begun in earnest. A new survey indicates underwriters are starting to hold their collective nose and write business that would not have merited a “no thanks” a year ago. As usual, larger risks are getting the best deals, but even small accounts are seeing discounts at renewal.
Of most interest to the most readers, workers comp rates have been affected more than most lines, with almost 90% of larger risks seeing flat to negative renewal rates.
This is a continuation of a softening market that has been progressively weakening for over a year. With a great big exception being property lines, especially in coastal areas.
Joe, my understanding is that there is also a correlation between the willingness of insurers to loosen their underwriting guidelines and the rate of investment return the insurer believes it can get on collected premium. When investment markets are good, insurers are more willing to collect less money in premiums than they project paying out in claims if they believe investment income can more than make up the difference.