Despite the damage caused by hurricanes, the insurance losses are not yet reflected in high premiums, customers will be pleased to know. Brokers, however, do expect home insurance lines to see a price increase at some point.
“Long term, all of the carriers will need to increase pricing and they would all like to, and they are probably telling their brokers they should be,” said Chris Zoidis, corporate senior vice president at wholesale brokerage Burns & Wilcox, to Canadian Underwriter “The problem is, there is so much capacity there seem to be a lot of alternatives, where if they increase prices, they lose too much business.”
Customers purchasing property insurance in Canada are still getting the same prices, and in some cases a small drops. Last Wednesday, Lloyd’s reported its combined ratio for the 2017 accident year of 98.4% excluding major claims. Zolis points out the data shows premium declines in recent years have hit the insurance industry in terms of profitability.
“That would be the case in Canada as well,” Zolis said.
Lloyd’s data mostly took into account the hurricane’s that struck the United States last year, Harvey, Irma, and Maria.
“There was the general view that even though these were storms isolated to the Caribbean and the southeast U.S., they were going to have a ripple effect through the entire market, whether that be property in Canada or general liability,” Zoidis added.
But “these storms occurred after multiple years with soft markets and price declines across all lines of business,” he continued.
“What really played out was [that] capacity across the insurance industry in the U.S. and Canada did not restrict,” Zolis said. “In fact, it continued to expand.”