Sean Thomas’ Post

The economic drivers of the U.S. property/casualty (P/C) insurance industry are growing faster than the nation’s Gross Domestic Product (GDP) and are expected to gain further momentum in the event of Federal Reserve monetary rate cuts, according to the Insurance Information Institute’s (Triple-I) latest Insurance Economics Outlook. https://lnkd.in/gdD7vhg8

Outpacing GDP: How the Insurance Sector Leads Economic Growth 📈💼 Imagine an industry quietly accelerating past national economic averages. That's the story of the U.S. property/casualty insurance sector, a true bellwether of economic resilience. As per the latest findings from the Insurance Information Institute (Triple-I), this sector isn't just matching the U.S. GDP growth—it's surpassing it! 2024 brings a promising outlook, with Triple-I projecting the P/C insurance sector to increase by 3.4 percent—outperforming the Fed's GDP forecast by a notable margin. It's a testament to the sector's strength and the potential for further economic gains if the Fed opts for interest rate cuts. These are more than just numbers; they represent real growth opportunities across essential areas like housing and auto sales. As we navigate through varying economic pressures, from geopolitical risks to monetary policies, it's clear that the P/C insurance industry stands as a robust force within our economy. What does this mean for investors, policyholders, and the economy at large? It signifies stability, confidence, and a drive toward future prosperity. As we lean into the rest of 2024 and beyond, watch this space—the promise of continued growth in the insurance sector may well signal broader economic successes. #InsuranceGrowth #EconomicOutlook #FutureTrends

Redefining Growth: 📈 Insurance Industry Surpasses US GDP! The insurance sector just outpaced the nation's economy! Data from Triple-I reveals an exciting trend: P/C insurance is not just keeping up; it's surging ahead of overall US GDP growth. With a robust 3.4% predicted increase for 2024, that's a clear lead over the 2.2% forecast by the Fed. What's the secret sauce? It might just be the potential for Federal Reserve rate cuts. Such a move could amplify crucial underwriting areas like housing and auto sales, providing a substantial boost to the industry. And let's not stop there - the momentum is set to continue into 2025 and 2026, painting a picture of sustained superiority. It's not all smooth sailing, though. The ebb and flow of economic stress factors, from the Fed's monetary fine-tuning to geopolitical unease, can still sway the tides. But for now, the future looks promising, with Triple-I's projections shining a beacon of optimism in uncertain economic waters. Stay tuned and watch this space as the story unfolds. The insurance industry appears to be on a winning streak that might just be a prologue to a bigger economic narrative. #InsuranceGrowth #EconomicOutlook #GDPForecast

𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗠𝗮𝗿𝗸𝗲𝘁𝘀 𝗮𝘁 𝗮 𝗧𝘂𝗿𝗻𝗶𝗻𝗴 𝗣𝗼𝗶𝗻𝘁 Insurance markets are at a critical juncture, with many non-life pricing cycles having peaked or slowed, while underwriting profitability has rebounded and capital positions remain strong. However, intensifying competition and shifting market dynamics mean insurers and investors must act strategically to stay ahead. Looking at the geopolitical environment, we remain vigilant about risks, while we do not foresee first-order effects on the insurance sector from the upcoming presidential renewal in the USA. 𝗖𝗹𝗮𝗶𝗺𝘀 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗽𝗿𝗶𝗰𝗶𝗻𝗴: Post-COVID claims inflation has eased, thanks to pricing actions now earning through, but it remains a persistent factor. Insurers adapt by embedding inflation considerations into underwriting and pricing decisions. 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗿𝗲𝘁𝘂𝗿𝗻𝘀 𝗼𝗳𝗳𝗲𝗿 𝘀𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆: While interest rates may soften, a return to historically low yields is unlikely. Sustained investment returns have supported earnings in the past two years and provide an added layer of resilience as pricing trends stabilise. 𝗦𝘁𝗲𝗮𝗱𝘆 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗴𝗿𝗼𝘄𝘁𝗵 𝗱𝗿𝗶𝘃𝗲𝘀 𝗱𝗲𝗺𝗮𝗻𝗱: For the next two years Swiss Re forecasts non-life premium growth of +2.3%, slower than the pace of the pre-pandemic average but supported by global real GDP growth of +2.7% (2024-2026). 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗳𝗼𝗰𝘂𝘀 𝗮𝗺𝗶𝗱 𝗰𝘆𝗰𝗹𝗶𝗰𝗮𝗹𝗶𝘁𝘆: The cyclicality of insurance markets underscores the opportunities available for insurers that are able to adjust their capital allocations across lines of business depending on the cycle. Multi-line insurers with diversified portfolios and strong reserving practices are well-positioned to navigate these shifts. The recent wave of extraordinary capital returns alongside Q3 2024 results reflects a focus on capital efficiency. 👉 𝗞𝗲𝘆 𝘁𝗿𝗲𝗻𝗱𝘀 𝘁𝗼 𝘄𝗮𝘁𝗰𝗵 • Selective underwriting: Shifting capital to preference growth in lines that have not peaked or are offering more favourable risk-adjusted returns. • Portfolio rationalisation: Streamlining operations through M&A and strategic transactions. • Reliable growth in capital returns: Capital efficient growth and strong starting solvency supports growing capital returns for shareholders. 𝗔𝗰𝘁𝗶𝘃𝗲 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗺𝗮𝘁𝘁𝗲𝗿𝘀: According to data from Bloomberg broad insurance indexes perform strongly, e.g., MSCI World Insurance TR is up 25% ytd in USD, with 25% of the index constituents up over 35% ytd. Active management within insurance equities provides opportunities, especially as underwriting cycles turn. Figures as at 22 November 2024 #Insurance #InvestmentOpportunity #Equity

Best’s Market Segment Report: US Property/Casualty Mutual Insurers Resilient Despite Perpetual Volatility September 19, 2024 07:41 AM (EDT)     AM Best: "U.S. property/casualty (P/C) mutual insurance companies have been able to lean on investment income to help offset the weather-related challenges that have driven underwriting volatility, according to a new AM Best report. The new Best’s Market Segment Report, “US Property/Casualty Mutual Insurers Resilient Despite Perpetual Volatility,” notes that in 2023, this segment faced pressure from continued inflation, with costs remaining high for traditional losses, on top of yet another year of severe weather-related activity. These factors drove pure losses up by nearly 15% in 2023, compared with a year earlier. US P/C mutuals recorded an underwriting loss of $36.6 billion last year, which was 17% higher than the overall loss recorded in 2022." https://lnkd.in/eYyVM_2P #insurance #propertycasualty #mutual

The US #life/#annuity #insurance segment remains well-capitalized after a nominal 1.6% increase in statutory capital and surplus through Sept. 30, 2023, from year-end 2022, and steady net income. However, uncertainty and volatility in financial markets, risks contained within certain asset classes and remaining legacy liabilities are lingering concerns for 2024. Learn more: https://bit.ly/3PoDpN1 #LifeInsurance #Insuranceindustry

S&P Global Ratings' sector view for U.S. P/C #insurance has turned stable, from negative previously, according to its article, "U.S. Property/Casualty Insurance Sector View Improves On Stronger Earnings And Capitalization," published today. P/C insurers have posted a significant improvement in underwriting profitability for personal auto and homeowners' insurance, and we expect this trend to continue. Specifically, underwriting results for personal lines improved due to rate increases insurers implemented and other actions to limit exposure and restore profitability. Commercial lines pricing has softened somewhat but underwriting results remain strong. Capital adequacy for some of our rated insurers has also improved, in our view, due to a rebound in GAAP (generally accepted accounting principles) shareholders' equity and changes in our criteria for assessing capital adequacy. The current distribution of rating outlooks for P/C insurers--an indicator of potential future rating actions--has a positive bias. However, the majority of our rating outlooks remain stable, so we expect the number of rating changes to be relatively modest.

According to the latest Insurance Economics Outlook from Triple-I, P&C replacement costs in the US are rising slower than overall inflation, expecting to maintain this trend for the next two years. Although the deceleration in cost increases may offer temporary relief for insurance carriers, it is unlikely to ease upward pressure on premiums, particularly with worsening underwriting trends. P/C replacement costs have climbed by 1.5% YTD, trailing behind the overall inflation rate of 3.5%. Based on Triple-I’s CPI forecast, US P/C replacement costs are projected to increase at a rate 1.75% lower than overall inflation over the next two years.

According to the Insurance Information Institute’s latest Insurance Economics Outlook, the economic drivers of the U.S. property/casualty insurance industry are growing faster than the nation’s Gross Domestic Product and are expected to gain further momentum in the event of Federal Reserve monetary rate cuts https://lnkd.in/gG8i3Hjm

The severity of losses in several US casualty #insurance lines has surpassed economic #inflation in the past decade, suggesting additional factors affecting claims costs. Explore the impact of social inflation in the article for more insights.