Related: Overall, 2014 was a pretty good year for the P&C industry, says ALIRT
Although the report did not specify what "gentle" meant, David Paul, principal at ALIRT
, said that premium increases in 2013 would probably be in the low-to mid-single-digit range.
hypothesizes that the cycle is different this time, for the following five reasons.
proposes the reason may be the amount of capital insurers are generating.
Additionally, surplus growth remained solid--although not quite as strong as 2012--among the insurers ALIRT
reports this is the best result since the first quarter of 2007, when sizeable reserve releases from the previous hard-market cycle were benefitting results.
The year's reported results continued to benefit from reserve releases, which were down from 2011 levels, but remained substantial, according to ALIRT
A market that experiences gentle premium increases may be the best outcome for all stakeholders as carriers' financial stability is sustained, capacity/coverage remains plentiful, and buyers do not face painful Cysticker shock' at renewal," says ALIRT
The ultimate direction, ALIRT
says, is in the hands of the companies and brokers.
But the industry continues to derive most of its pretax net income through investment gains rather than underwriting results, and those investment gains are pressured by the low-interest-rate environment, ALIRT
This is a new animal," ALIRT
principal Daniel Paul says of this particular dynamic.
insurers covering personal and commercial lines, ALIRT
says the financial stress insurers are experienced last year is not close to past hard market turn experience.