Risk Placement Services (RPS) has released its Q3 Market Update, providing insights into trends and developments in the property and casualty insurance and comprehensive/excess insurance sectors.

Real Estate Market Overview

According to James Rosie (pictured above left), executive vice president of the region at RPS, the E&S market has seen a marked turnaround in the first half of 2024 compared to the previous year. Average E&S rates have declined by 5% to 12.5% ​​in many cases.

However, not all accounts or asset classes saw these price cuts or enhanced coverage.

In his report, Rosie noted that some carriers are moving away from accounts that no longer fit their models or where opportunistic deals struck last year do not justify price cuts. Carriers are seeking to maintain a balance between disciplined underwriting and maintaining market leadership.

Looking ahead, Rosie emphasized that not all accounts will see price cuts or improved coverage. He noted that about 80% of the business handled so far in 2024 has shown better results than in 2023, which is good news for buyers.

These results are expected to allow airlines to maintain profitability in the long term, even in the event of adverse weather conditions. However, the remaining 20% ​​of deals face challenges, as price increases are linked to poor loss performance and market conditions where supply does not yet meet demand.

Read more: What is the magnitude of a natural event that could cause real estate to return to a difficult market?

Rosie also said the market is unlikely to see a full-blown downturn, even if the hurricane season is less severe. Carriers are using artificial intelligence, improved data and advanced underwriting models to make informed decisions about premiums and when to pull out of certain risks. This disciplined approach is expected to prevent a major market downturn.

Umbrella/Surplus Market Update

The current legal environment, coupled with inflation driving up medical costs, is leading to more complex and expensive claims in the middle-market business, said Ross Stein (pictured above right), regional executive vice president at RPS.

According to Stein, this has led to a continued exodus from standard and aggregate insurers, with a corresponding increase in business entering the E&S market. Mid-sized insurers, which previously earned lower premiums outside the E&S market, now face pricing challenges and higher costs.

Stein also noted that auto insurance claims remain a big issue, impacting capacity, attachment points and pricing for excess and umbrella insurers.

A key theme in today’s casualty insurance market is the importance of providing accurate and comprehensive information. Stein emphasized the need for continuous communication between insureds, agents, brokers and insurance companies to develop the most competitive programs.

Given the ongoing legal challenges in the market, partnering with an accident expert who can accurately explain market dynamics and secure the best solutions for clients remains critical.

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