FOR IMMEDIATE RELEASE
Contact: Nicole Vasile
Vice President, Marketing & Communications
Contact: Zach West
Q3 2023 P/C Market Survey shows Softened D&O Premiums for First Time since Q1 2017
WASHINGTON, D.C. – Overall premiums increased by an average of 8.1% in Q3 2023 in comparison to 8.9% in Q2. This marked the 24th consecutive quarter of steady increases.
Most lines of business saw increases at around the same level as the first half of 2023, except for workers compensation and D&O. A standout exception this quarter, D&O recorded a decrease of -0.3%, the first time D&O premiums decreased since Q1 2017. While respondents did not specify why this was, a report from Woodruff Sawyer put forward some possible causes, including decreased demand for D&O due to fewer IPOs and a decline in securities class action lawsuits.
Commercial property continued to struggle in Q3 2023. As with previous quarters, respondents pointed to high reinsurance costs and a lack of reinsurance capacity as important drivers of high premium increases for the line. Respondents were also explicit in attributing the relentless natural catastrophe losses, another driver for premium increases, to atypical weather patterns from climate change.
Respondents also made clear this quarter that persistent premium increases and increased carrier scrutiny have had a negative effect on client perception of the industry. On average, 70% of respondents described hearing some level of rate fatigue from their clients; nearly half said their clients felt burdened by carrier requests for information.
Concerningly, more than 40% said their clients felt some level of mistrust towards the industry. One respondent attributed this sentiment to the fact that clients still saw increases in their premium even if they had no losses, leading to frustration with the system. Another said that, in the face of carriers pulling back from property risks or even leaving the market altogether after major losses, like in Florida, their clients felt that the industry was “running away from what is considered traditional risk instead of providing solutions.”
Respondents prioritized becoming more data-driven this quarter. “There is an opportunity for us to leverage data to ensure better results for our clients and reduce the friction in the system,” said one respondent from a large Southeastern firm. For some, this meant using third-party vendors to evaluate and sort their data so that they could access important insights more easily and more quickly; others sought to find ways to bring in external data to bolster their existing data set.