In this week's news will talk about How much of an impact will Hurricane Beryl have on P&C insurers, New law hits pause on premium surcharge, and much more…
Favorable first-quarter economic and underwriting results for property/casualty insurance align with projections that the industry will see a small underwriting loss in 2024 and achieve profitability in 2025, according to the latest forecasting report from the Insurance Information Institute (Triple-I) and Milliman.
The report, Insurance Economics and Underwriting Projections: A Forward View, highlighted several key findings. Homeowners insurance is expected to continue experiencing underwriting losses through 2024-2025 but is projected to become profitable in 2026. This line will see continued double-digit net written premium growth over the next two years. Meanwhile, the personal auto net combined ratio has improved slightly from prior estimates, with profitability anticipated in 2025.
AM Best has ranked the world’s biggest insurance brokers based on 2023 total revenue, with a new number three emerging and three newcomers making the cut.
AM Best highlighted that 2024 is the 14th year in a row that Marsh McLennan topped the list. The credit rating agency also explained that total revenues for Hub and Acrisure appear the same as a result of rounding. Meanwhile it was noted that Gallagher, the new world number three, completed 51 brokerage and risk management acquisitions in 2023.
Louisiana Citizens Property Insurance Corp. will halt its mandatory 10% premium surcharge for the next three years, with policies issued or up for renewal after the New Year not including the surcharge. The suspension, as per a new law that went into effect this month, will last until the end of 2027.
Meanwhile, a provision states that if Citizens writes less than 20% of residential property coverage in any parish, the insurance commissioner may recommend reinstating the surcharge.
Initially, the surcharge was introduced to ensure the state’s last-resort insurer's premiums were higher and noncompetitive with private market options. Recent market volatility – characterized by rising rates and insurers scaling back or exiting the state – though, prompted legislators to implement reforms aimed at attracting more insurers and fostering competition to lower rates.
Moody’s Ratings has weighed in on the likely impact of Hurricane Beryl on property and casualty insurers, saying the weather event’s effects will be readily manageable.
“The magnitude and allocation of insured damages will take time to determine,” Moody’s Ratings said in a sector comment. “However, we expect that insurers’ losses from Hurricane Beryl will be low and readily absorbed by their earnings.”
The credit rating agency, meanwhile, noted that State Farm, Allstate, and USAA (United Services Automobile Association) are the homeowners’ insurers expected to be most affected, based on their premium volumes in Texas. “Commercial property insurers… are likely to experience some losses as well,” it stated. “Large national carriers have ample capacity to withstand much larger storms based on their careful monitoring of coastal exposure, geographic diversification, high-quality reinsurance protection, and strong capital bases.”
Tesla has been granted additional time to prepare its defense in a class action lawsuit alleging overcharging for insurance. The case, which claims Tesla inflated insurance premiums based on inaccurate crash warnings, is set to be reviewed for class-action status in October 2025, Judge Michael Markman of Alameda Superior Court in Oakland has decided.
A Tesla customer initiated the lawsuit last year, representing drivers from 11 states, asserting that the company’s insurance premiums were unjustly raised due to "false" crash alerts rather than actual driving behaviors. The complaint states that Tesla's insurance policies, directly sold to customers, breached California’s unfair competition law and violated driver contracts.