US property & casualty outlook - commercial rate hardening and stronger economy drive recovery
Article information and share options
We expect a robust recovery in 2021, supported by rising economic strength and continued rate hardening in commercial lines. Premium growth for fullyear 2020 will slow due to the COVID-19 recession, but 2Q20 results indicate that the market has held up better than expected due to resilience in demand and accelerating rate hardening in commercial lines. We expect commercial rates will continue to harden as the pandemic has driven up claims costs in commercial insurance and cat losses mounted in 3Q20. Investment results will remain under pressure and while asset valuations have recovered from their first-quarter lows, low interest rates will continue to curb future investment returns.
- We revise up our 2020 premium growth estimate to 2.7% after stronger than expected economy in Q3
- Commercial lines pricing set to strengthen, supporting 5.4% market growth in 2021.
- Personal auto set for strong result, but overall sector profitability will under pressure, even with rate hardening.