Property Market Implications for 2023
Today we will cover some of the details regarding the state of the property market and what you can expect through 2023. Although there does not appear to be any implications of good news at this time, not all hope is lost as there are plenty of options to make a plan to best support yourself and your business in the market during 2023.
The reality of the Property Market
As we progress through 2023, there are some harsh realities that we should begin to accept. For instance, issues involving property valuation will continue to be a hot topic of discussion for the future as a major issue at least for the foreseeable future as labor costs continue to rise. Also, in terms of catastrophe insurance capacity (CAT) will be expensive, some paying the same for half the limit than they have before that offered double the coverage. Lastly, in terms of E&S carrier appetites, these are expected to stay consistent as while they intend to be writing out new businesses, they are intending to increase their premium minimums which will ultimately cut line size deals.
Expectations of Carriers
Ultimately, it appears that carriers are expected to take their cost increases and pass it onto their buyers. One company in particular stated that their retention on excess of loss CAT cover insurance increased by approximately $250 million. As a result, carriers have had no choice but to have limited options for what they are able to offer to customers, however this is primarily done to keep their head above water. Unfortunately, it appears that the outlook for 2023 is expected to provide buyers with double-digit percentage increases to their coverage costs for the sixth straight year.
The Bottom Line
Ultimately, while the outlook for the property market may not look the best for 2023, the fortunate news is that there are some steps you can take to minimize the negative factors out of our control. The best advice we can give is to stay diligent and formulate a plan. Since we already know the outcomes of 2023 may be bleak, make sure you are at least equipped with the tools to tread the waters. There are plenty of changes that may also occur as the year has just begun a short time ago. Consistently stay on the same page with your brokerage teams and make proper planning efforts and you can remain profitable despite these negative implications currently coming out of the property market.
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