Last year Swiss Re predicted commercial lines rates would end up rising by 7.5% in 2023. Late last week the company revised its prediction and now says look for an average increase in premium rates of 9%.
The company says the numbers will drop significantly to 5.5% in 2024.
“Overall, we expect rate increases through 2023 as inflation and catastrophes put upward pressure on claims and operating costs,” the Swiss Re report said.
According to the Council of Insurance Agents & Brokers (CIAB), rates for commercial lines rose on average of 8.9% in the second quarter of 2023 when compared to 2022’s increase of 8.3%.
However, property rates dropped to a 20% increase after a 21% rise in the first quarter of this year.
The report also predicts a drop in the combined ratio for the property casualty sector in 2024. It’s forecast to end up at 102% this year. Swiss Re thinks in 2024 the combined ratio will be 98.5%.
“We expect loss severities to ease as average US headline CPI inflation decelerates to our forecast 4.0% in 2023 and 2.5% in 2024, setting the stage for improved underwriting results as rate gains eventually outpace claims costs,” the report concluded.
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