热点黑料

A survey conducted at the 热点黑料 Information Institute’s Property/Casualty 热点黑料 Joint Industry Forum in New York Tuesday asked industry leaders for their outlook on 12 topics — ranging from the Terrorism Risk 热点黑料 Act and the Biggert-Waters Flood 热点黑料 Reform Act to the industry’s combined ratio and premium growth.

On the federal terrorism insurance backstop, 93 percent of those polled said they expect the Terrorism Risk 热点黑料 Act, which is set to expire Dec. 31, 2014, to be reauthorized by Congress.

On the Biggert-Waters Flood 热点黑料 Reform Act, 75 percent said they expect Congress to delay implementation. (A bipartisan spending bill unveiled this week in Washington could postpone for about eight months some flood insurance rate increases triggered by the Biggert-Waters Act. It passed the House yesterday.)

The survey also showed many executives are expecting a stricter regulatory environment in the year ahead — with 70 percent saying they believe the federal government is interested in further expanding its regulatory oversight of insurers.

Forum participants included nearly 250 representatives from P/C insurance and reinsurance companies and organizations. Of these, roughly 40 percent responded to the survey.

Broken down by lines of insurance, 35 percent said they expect improved profitability in personal auto in 2014, while 45 percent said they expect improved profitability in homeowners lines. Only 40 percent said they expect an improvement in commercial lines and 50 percent said they expect an improvement in workers’ compensation.

Looking at economic growth, 40 percent said they expect the U.S. economy to accelerate while 58 percent said they expect the economy to remain the same.

“Many economic forecasts say that the U.S. and most global economies will grow stronger in 2014, and this means a greater need to protect more assets and income, which leads to greater insurance premium volume,” said Steven Weisbart, senior vice president and chief economist with the I.I.I. “Both personal lines (auto and homeowners insurance) and commercial insurance will see increased exposures. 2013 was the industry’s most profitable year since the Great Recession, and 2014 could be even better, barring major catastrophe losses.”

Thirty percent said they expect premium growth to be higher in 2014; 42 percent said it would remain flat; and 28 percent said it would be lower. In terms of capacity, as measured by policyholders’ surplus, 73 percent said they expect it to increase; 20 percent said it would remain flat; and 7 percent said it would decrease.

Survey: Higher Combined Ratio Expected in 2014

Compared with last year, 68 percent said they expect the combined ratio to be higher in 2014. The combined ratio improved by 5.8 percentage points to 96.6 percent in the first nine months of 2013, from 100.9 percent in the first nine months of 2012.

“Combined ratios must be lower in today’s depressed investment environment to generate risk appropriate ROEs,” added Weisbart. “Lower catastrophes helped pull up ROEs in 2013,” he said.

One way to lower expenses is by consolidation; 75 percent of respondents said they expect an increase in consolidation among insurers and reinsurers in 2014.

In the area of torts, 80 percent of respondents said they expect tort trends to remain the same in 2014; 15 percent said it would deteriorate and only 5 percent said it would improve.

On the investment side, 83 percent said they expect another “up” year in the equity markets in 2014 (For the industry as a whole, equities constitute only about 15 to 20 percent of invested assets. About 70 percent of invested assets are in bonds.)

Industry leaders were also asked whether they expect interest rates to rise, fall or remain flat in 2014. Eighty percent said they expect interest rates to rise, while 20 percent said they expect interest rates to remain flat.

Below are the poll questions and full results.

Source: 热点黑料 Information Institute

Topics Flood Property Casualty