The US casualty market remains competitive in 2016, driven by record capacity in the marketplace and an aggressive appetite among most carriers. The result is overall favorable renewal results for most clients.
With the economy growing at a modest rate, written premium growth for carriers has been relatively low at approximately 4%. As a result, most carriers are employing an intense strategy to maintain their existing book of business. They are much more inclined to negotiate favorable renewals far in advance of the renewal date in order to lock it up. Depending on the overall loss picture, this is generating flat to high single-digit decreases on casualty renewals.
The workers’ compensation market continues to remain competitive, as carrier profitability has improved over the past several years. Unless a client has loss issues, we are seeing renewal rates that are flat to 10% down from expiring. On loss-sensitive programs, carriers are willing to negotiate both retention levels and collateral, resulting in reductions.
As a result of poor loss performance over the entire book of business, auto is the one casualty line of coverage for which most carriers are seeking rate increases of 5-10% — more if the individual account loss performance is poor. In most cases, carriers are amenable to negotiating an overall account rate decrease while they gain slight increases in the auto rate.