Nearly half of the U.S. property insurance policies renewed in the current quarter have been at higher prices, brokerage Marsh said on Friday, adding fuel to an industry turnaround after years of declining property insurance rates.
48 percent of property policies renewed in the fourth quarter have been at a rate at least 1 percent higher. Nearly 20 percent of policies have been renewed at rate increases of more than 10 percent.
In addition, nearly a fifth of renewals were done at flat rates with the prior policy.
With more than $70 billion in disaster losses worldwide this year, insurers are anticipating what they call a “hard market” — a period of pricing strength where they can consistently raise customers’ rates.
That would follow years of sharp price declines that in some cases left rates at decade-long lows. Across all policies, the average rate increase this quarter is 1.7 percent.
“While the market is not classified as ‘hard,’ it is increasingly difficult to achieve cost savings and more insureds are faced with modest increases at renewal,” Marsh said in its regular benchmarking report.
Marsh is a unit of Marsh and McLennan.