US COMMERCIAL P/C SECTOR STABLE FOR 2014: REPORT

The US commercial p/c sector is expected to be stable and competitive in 2014 and present a good market for buyers, according to Wells Fargo Insurance’s 2014 Insurance Market Outlook. “We expect 2014 to be a good year for the majority of our commercial p/c insurance customers”, said Simon Hodge, head of the broker’s professional risk group. In the property market, Wells Fargo sees abundant capacity, with more than $600b of policyholders’ surplus and new capital being provided by the recently created Berkshire Property Specialty unit and several Chinese carriers. Despite declines in reinsurance prices, the cost of property catastrophe cover is expected to remain flat to only slightly down, the report said. Insureds without recent or historical losses and those with above-average construction and acceptable fire protection features will see the best rate reductions. In primary casualty and umbrella/excess casualty lines, Wells Fargo expects the majority of insureds to see rate increases throughout the first three quarters of the year, with possible moderation during Q4. In primary casualty, poor risks can expect rate increases of up to 20%, while those with high deductibles will see increases of 0% to 5%. Lead umbrella rates are expected to rise by 3% to 10%, while excess liability rates are projected to rise by 0% to 5%.