PIA Market Trends Survey: Agents perceive moderation in unrelenting rate and underwriting severity

GLENMONT, N.Y.—The Professional Insurance Agents of Connecticut, New Hampshire, New Jersey and New York State released the findings of their annual Market Trends Survey, conducted through the month of January. Some 200 agents participated in the survey, which has been conducted every year since 2012, after a renovation of the associations’ original “Hard Market Survey” of the early 2000s.

The survey asked producers in the four PIA affiliate states if their clients are experiencing increases or decreases on various lines of business (personal auto, homeowners, commercial property, and commercial liability) and if their carriers’ underwriting guidelines are tightening or relaxing over the past year. Consistent with the past four years, respondents told PIA that prices are rising, while underwriting continues to tighten. However, the extent to which respondents in the survey say they are experiencing this rise seems to have relented somewhat.

When asked, “To what extent are underwriting guidelines becoming more strict?” 32 percent of respondents indicated a “moderate change” in the underwriting approach to homeowners, reflecting a downward shift from 34 percent last year. Additionally, 13 percent of respondents said they’ve experienced a “significant change,” compared to 36 percent last year.

A similar trend was reflected in pricing. Eighty-five percent of respondents said homeowners rates have increased over the past year, down from 91 percent who reported an increase in 2015.

Similarly, 80 percent of respondents said they’ve experienced no, or minor, increases in nonrenewals in both personal- and commercial-lines policies, compared to a majority (63 percent) who reported minor to moderate increases in nonrenewals last year. Fifty percent of respondents reported no change in nonrenewals for personal auto in this year’s survey.

In terms of underwriting changes (for both personal and commercial business), 56 percent of respondents reported minor to moderate changes in underwriting in this year’s survey. This reflects a decrease from last year, when 61 percent of respondents indicated “moderate to significant” changes. “It appears that the stringent underwriting is loosening its hold,” said PIA Director of Business Issues Jim Pittz, CIC, CPIA.

Additional findings from the survey also indicate a moderation in market conditions. These include: 39 percent of respondents reported placing less than five percent of their business through wholesalers and 82 percent of respondents said they have increased their marketing efforts over the last year.

“PIA wants to thank all of its members who participated in the Market Trends Survey,” said Pittz. “Input from the agency itself is unique and an important way for us to measure coverage availability and cost.”