The Professional Insurance Agents (PIA) said its recent survey shows significant market changes in the Northeast — with the homeowners insurance and commercial property market appearing to be most affected by the shift.
More than 400 PIA members from Connecticut, New Hampshire, New Jersey and New York took part in the survey, whose preliminary results were published on May 13.
The shifting market is pushing independent agencies to increase remarketing, the survey said. PIA members responded that, on average, they are remarketing 11 to 15 percent of their business. The majority of respondents reported increased remarketing — with 93 percent saying they needed to boost remarketing efforts over the last year.
The PIA and Professional Insurance Agents of Connecticut, New Hampshire, New Jersey and New York (PIACT, PIANH, PIANJ and PIANY) represent a partnership of four state trade associations. The following are some of the survey’s main findings.
Homeowners
The PIA said 95 percent of respondents indicated new business price hikes for the homeowners insurance, with nearly half reporting increases in the range of 6 to 10 percent. Additionally, 45 percent of the responses reported a significant or extreme change in the underwriting approaches to homeowner policies. The associations said this is a direct result of the recent changes in the market, including the result of Superstorm Sandy.
Approximately 45 percent of respondents reported increases in nonrenewals — with even more significant changes for businesses in coastal areas.
Personal Auto
The PIA said personal auto appears to have been least affected by the shifting market. Survey respondents described an average price hike of 0 to 5 percent on new businesses. Eight percent of respondents said they have seen price decreases.
Approximately half of the respondents said underwriting changes are minor or have stayed the same. Some 71 percent of the respondents saw no change or minor increases in the frequency of nonrenewals.
Commercial Property
The survey found that commercial property, like homeowners, appears to be suffering a significant impact from the shifting market. The survey said 96 percent reported price hikes on new businesses, while 97 percent reported price hikes on renewals.
More than 50 percent of the respondents said the most frequent price hikes were in the range of 6 to 10 percent, with additional 21 percent seeing price hikes in the 11-to-15 percent range. Underwriting guidelines seem to be shifting for this line of business, with 30 percent of respondents reporting significant changes in the underwriting approach. But there does not seem to be a shift in the nonrenewal activity — respondents reported only minor changes. The PIA said it appears carriers are willing to keep the current business on the books — but at a price.
Commercial Liability
The survey found that commercial liability appears to be less affected by the market change. The respondents said they are seeing, on average, a price increase range of 6 to 10 percent. However, those responses also reflected the second-lowest survey numbers — right behind personal auto. More than 60 percent said they saw little to no change in nonrenewals, with minor changes in underwriting guidelines.
Topics Agencies Underwriting Homeowners Property
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