istock-507681856_guvendemir-3
iStock/Guvendemir
14 January 2019Insurance

P&C sector faces higher Q4 cat losses: KBW

P&C re/insurers face higher year on year catastrophe losses in the fourth quarter of 2018 results reflecting hurricane Michael, California wildfires, and some smaller events, but overall losses should be manageable, according to Keefe, Bruyette & Woods (KBW) analysts.

Pricing should reflect expected line-specific returns, KBW said, noting that it expects most commercial lines’ increases to strengthen into 2019 while workers' compensation rate decreases should decelerate. Personal auto increases should fade and reinsurance pricing should trend up modestly as demand growth outpaces (still-ample) capacity, according to KBW. “We expect 1/1 reinsurance pricing commentary to be slightly better than initial broker reports, reflecting initially-incomplete programmes,” analysts said in the report.

Hurricane Michael and the California wildfires should produce sizeable (albeit manageable) catastrophe and weather losses, the analysts noted. KBW expects roughly stable core accident-year margins in most lines besides as earned rate increases should mostly offset higher loss trends. In personal auto, earned rate increases and higher gas prices year on year still imply higher margins year on year, although previously better-than-expected personal auto claim frequencies should get a little worse, analysts noted. In workers compensation rate decreases coincide with reportedly accelerating loss trends while overall, rising casualty loss trends should depress most insurers’ reserve releases, the report added.

Get all the latest re/insurance industry news with our daily newsletter -  sign up here.

More of today's news

MS Amlin CFO resigns to join Hastings Group

Lloyd’s should focus on US, not emerging markets, says new LMA chair

US P&C faces slower reserve releases, higher loss trends

HDI Global Specialty downgraded by AM Best

Munich Re backed on-demand insurtech Trov expands in US

Beazley bolsters European financial lines team with Hiscox, Aon hires

January 1 renewals rate movement limited: Guy Carpenter

Don't miss our insurtech email newsletter - sign up today

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
28 August 2019   Tropical Storm Dorian is expected to strengthen into a hurricane and predictions suggest it could make landfall on the Florida coastline on Monday September 2 early in the morning, US east coast time.
Insurance
14 January 2019   Positive P&C pricing and rising investment income in the US insurance sector are expected to be offset by slower reserve releases and higher loss trends in 2019, according to Morgan Stanley analyst Kai Pan.