Posted on August 11, 2023 in News

Property Industry Update

August 12, 2023 – As we advance into the second half of the year, the property insurance market remains challenging. Rates are increasing across the board – it is typical to see 10-20% increase for non-CAT exposed risks, while those that are located in CAT-prone areas, or which have suffered losses are seeing more than 25% rate increases.

Insurance companies remain focused on adequate valuations, seeking year-over-year improvements that are aligned with inflation to offer appropriate replacement cost coverage. When valuations remain stagnant, insurance companies may place coverage restrictions on the account, including actual cash value or coinsurance provisions.

From a capacity standpoint, insurance companies are restricting capacity on individual risks, which is resulting in accounts needing to be written within shared and layered placements. This is especially prevalent in high CAT areas.

Many carriers are re-underwriting their risk portfolios away from more hazardous occupancies and pushing more placements into the non-admitted space.

Additionally, several carriers have restricted EQ capacity. In high-risk areas such as California, the Pacific Northwest and New Madrid, EQ coverage rates are increasing significantly and require multiple carriers to participate and purchase expiring limits.

We are also seeing trends where many insureds are purchasing lower limits than in previous years because the rates are so high, and the cost associated with lower layers. There may also not be enough capacity in the marketplace to complete those program placements.

Given the ongoing complexities within the property market, RB Jones Property is continuing to assist clients in navigating these challenges. The company has exclusive and dedicated capacity that is not available anywhere in the market. Importantly, RB Jones is also consistently recognized for its creativity in delivering unique underwriting solutions.