There are a number of challenging areas that continue to impact the hard Property market:
1) Catastrophic Losses - In 5 of the last 6 years, CAT events have caused annual insured losses of over $100 billion globally. Last year alone, global insured losses approached $140B.
2) Reinsurance - Inflation and the economic environment has made reinsurers more selective. In early 2023, the gap between reinsurance supply vs demand was estimated at $60B (3X what it was the previous year).
3) Underinsurance - Inflation has driven the cost of material and service up but just 43% of business owners say they have increased their policy limits to accurately reflect what it would take to replace their insured property now. You don’t want to come up short after a loss but premiums will reflect those higher values.
4) Property Replacement Cost – Construction costs have continued to increase over the last 3 years. Structural steel is up 55%, the price of lumber is up 35% and machinery and equipment costs have increased 18%. Contractors continue to grapple with material shortages and supply chain disruptions as well.
5) Skilled Labor Shortage – Wages and salaries make up nearly half of reconstruction costs and have collectively increased 15% over the past 3 years. Even with higher pay, 9 out of 10 contractors are struggling to find skilled labor and projects are delayed as a result. Higher rebuilding costs and longer delays might trigger an increase in business interruption loss.
6) Property Rate – For years, escalating loss trends have outpaced rate increases, primarily because of the costs of CAT losses. Underwriters are expected to increase rates again this year.
This just touches on the evolving Property landscape. If you want to learn more about this, Casualty, Executive Risk and Cyber market expectations… don’t miss the chance to register for this virtual panel discussion – this Thursday, 11/9. Link below!
Join us for our Commercial Lines Educational Virtual Panel on 11/9! REGISTER HERE: https://lnkd.in/gcfKmgs2 We'll be featuring five industry thought leaders who will share invaluable insights on 2023 insurance trends and marketplace challenges, and we’ll explore proactive strategies for anticipating 2024 developments in the Property, Casualty, Executive Risk, and Cyber markets. Don’t miss this opportunity to ask questions and stay ahead in the evolving insurance landscape!
![2023 Insurance Market Trends in Review and What to Expect in 2024 - Brown & Brown]()
2023 Insurance Market Trends in Review and What to Expect in 2024 - Brown & Brown
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