As the year-end approaches, all eyes are on January 2023 property treaty renewals. Even before Hurricane Ian struck at the end of September, reinsurance pricing and availability were a key concern for the sector. However, the hurricane’s devastating impact has served to amplify those concerns and solidified the reinsurance market’s resolve in a rapidly hardening property market. Inevitably, these concerns will impact insurers’ capabilities and capacities available to insureds in 2023.

PLACING YOU FIRST BEFORE, DURING AND AFTER THE STORM.
CRC group is here to help with all of your claims and policy servicing issues as a result of catastrophes, including helping clients prepare for a potential claims situation.

When a fast-moving wildfire threatens a community, residents may have only minutes to seek safety. It’s an all-too common scenario for Californians and others in the West, who have suffered through more than one devastating fire season. California’s 2018 Camp Fire, the most destructive wildfire in history, burned 6,700 structures while Southern California wild fires burned 177 structures, with losses for these fires totally around $7 billion (source 3). 2019 was a much milder wildfire season, especially in comparison to 2017 and 2018; however, California remains the top state in the country for extreme wildfires with more than 2 million properties at risk (source 7).

The severe hurricanes and record-breaking wildfires that have caused widespread damage in recent years have heightened concerns that a changing global climate may be leading to more frequent and extreme natural catastrophes. Among the possible effects of climate change, stronger and slower-moving hurricanes may bring more devastating winds, higher storm surge and greater inland flooding; hotter temperatures can dry out vegetation and raise the risk of wildfires, particularly as people move into formerly wild areas. Those changes may lead to greater risks for property owners and higher-than-expected claims for insurers.

The property market continues to change amid decreased capacity and increased caution among carriers. There is little capacity left among many Lloyds syndicates, and domestic markets are more selective overall—particularly on tougher classes of business. While the first quarter of 2020 may bring some relief on capacity, insureds should expect increased rates, higher deductibles and greater scrutiny from underwriters. Valuations are particularly important along with better data on construction, especially for roofs. In this transitioning market, experienced brokers show their worth in finding the best solutions for clients.