From: Risk & Insurance
Captives, parametrics and other alternative risk transfer tools are likely to remain relevant well into the future.
Over the last several years, insureds have seen rate increases across a number of lines. Shifting exposures, economic uncertainty and other factors are causing carriers to decrease their appetites for a number of risks in the commercial property and casualty market.
Few lines are experiencing as dramatic an increase in rates as the property market.
Battered by years of increasingly frequent natural catastrophes, many property carriers are pulling back their capacity. Costs of recovery, too, are increasing. Supply chain delays, gaps in property valuations, rising interest rates and inflated building materials prices are all raising claims expenses. Bob Nusslein, head of innovative risk solutions for the Americas with Swiss Re Corporate Solutions, estimates that rates are increasing by 30-50% or more for insureds with heavy CAT exposures.
“In my career, I haven’t seen a property insurance market as hard as this one right now,” Nusslein said. “It’s hardened significantly over the past several years. Prices, particularly for property insurance and Nat CAT risk, are up dramatically. Retentions are up, terms and conditions and policies are starting to become more restrictive.”