In the second quarter of 2024, the commercial property and casualty (P&C) insurance market showed further signs of softening, according to The Council of Insurance Agents & Brokers’ (CIAB) latest quarterly survey.
Premiums across all account sizes increased by an average of 5.2% in Q2 2024, a noticeable drop from the 7.7% rise in the first quarter of 2024.
Medium-sized accounts experienced the most significant slowdown, with premium growth decreasing from 8.5% in Q1 to 5.1% in Q2.
The softening market is also evident in the lines of business. Premium increases were flat or down across all lines compared to the previous quarter. On average, commercial lines saw a 5.6% increase in premiums.
Notably, four lines recorded lower premiums this quarter: workers’ compensation, cyber, directors and officers (D&O), and employment practices liability.
Workers’ compensation premiums fell the most, with an average decrease of 2.2%, followed by a 1.7% drop in cyber premiums. This is a sharp contrast to two years ago, when cyber saw multiple quarters of over 20% increases.
While respondents did not specify the exact reasons for this decline, 46% noted increased capacity for cyber in Q2 2024. Generally, more capacity can lead to lower premiums, though this is not always the case.
Additionally, many respondents observed increased competition and new investments entering most markets, which can also contribute to lower premiums.
On the other hand, commercial auto premiums rose the most in Q2 2024, increasing by 9.0%. This was slightly above the 8.9% rise in commercial property premiums. However, both increases were lower than those seen in Q1, which were 9.8% and 10.1%, respectively.
As in previous quarters, respondents’ top three concerns for clients were high current premiums, future premium increases, and limitations on coverage.
Cyber risk was also a major concern, with 30% of respondents citing it as a key issue for their clients. In light of recent ransomware attacks and incidents like the CrowdStrike IT outage, brokers need to guide clients in implementing effective cybersecurity measures, such as multifactor authentication.
Technology, especially AI and automation, was another major focus this quarter. Some respondents noted that carriers are using AI to aid in commercial property assessments, while others reported challenges with adapting to new systems. Concerns were raised about overreliance on automated underwriting and the lack of personalised understanding of clients and their unique risks.
The post CIAB observes softening commercial P&C market in Q2’24 appeared first on ReinsuranceNe.ws.
