In insurance terms, 2017 will be remembered as one of the most active and financially disruptive hurricane seasons in history. The unprecedented windstorm and flooding events related to Hurricanes Harvey, Irma, and Maria (with insured loss estimated at circa USD100bn), the two Mexican earthquakes coupled with an abundance of attritional losses (hail, wind and flood) in the first two quarters of 2017, would suggest that the Property market is overdue some sort of market correction.
Despite the damage caused, the market has remained relatively stable to date as insurers have had little chance to definitively account for their ultimate losses. Once insurers have collated their loss estimates, and the prediction is that the majority of the property markets will have a combined ratio in excess of 100 for 2017, the market will begin to move in a number of ways not only with rate increases, but also the potential for a number of markets to either exit the Property market or leave the insurance market completely. As 2017 drew to a close, such a trend had already begun with a number of markets actively reducing their capacity across all areas of their portfolio with some others closing their Property book altogether. It is expected that this trend will continue throughout 2018.
In terms of the Property market outlook for 2018, accounts with CAT exposures and losses will undoubtedly face renewal situations with increased pricing, potentially narrower terms and perhaps less available capacity. If in fact the industry moves in the direction of increasing property premiums across the spectrum, it will remain to be seen whether this approach will be sustainable over any sort of extended period.
The market is still healthy and there will always be competition for accounts with high-quality risk protection, favourable loss records and a good spread of risk. We expect therefore the Property market to remain competitive for new business opportunities with first-class risk profiles. The Barents Property team has built long-standing relationships with clients who value our experience, local market knowledge and strong service culture; attributes which put us in an excellent position to continue our success in 2018.