74 percent said premium growth will be higher in 2013; 21 percent said it will remain flat; 5 percent said it will be lower, according to a survey of 95 P&C insurance executives conducted by the Insurance Information Institute (I.I.I.).
These high expectations come despite the fact that respondents believe Washington’s ongoing budget battles will have a negative impact on the U.S. economy; yet, 23 percent said the U.S. economy is “on the right track” for the New Year. In addition, 74 percent said the federal government would like to expand its regulatory oversight of the insurance industry.
“As the economy continues its recovery, exposures will continue to grow implying further increases in insurance premium volume,” said Dr. Steven Weisbart, SVP and chief economist for I.I.I. “Moreover, business bankruptcies in 2012 dropped below their level at the start of the 2007-'09 recession and are expected to continue falling in 2013, so the erosion of commercial accounts will continue to ease. Moreover, the number of business startups has been rising, further feeding the demand for commercial insurance in 2013,” he added. “However, the low-interest rate climate, which will likely persist throughout 2014, will challenge insurers to price risks in closer relation to their claims potential.”
Highlights from the survey:
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