CRC REDY property index shows double digit increases continued in December

E&S property renewal pricing was up 10.7 percent based on CRC’s latest REDY index as the wholesaler highlighted some of the ongoing issues impacting dynamics in the sector.

The December increase represented a modest deceleration from the 11.5 percent uplift for November but was the second highest renewal change since last June when renewal premium pricing was up 12.2 percent.

A greater proportion of accounts – 16 percent compared to 13 percent in November 2021 – renewed with upwards average renewal changes of 20 percent or more, with 34 percent seeing increases of 10 to 19 percent, 34 percent seeing pricing that was 1 to 9 percent higher and 16 percent with no hike at all.

The proportion of accounts with increases of 20 percent or more was the highest since June last year.

In commentary released with the latest index, CRC said that natural catastrophe exposed placements including tier 1 wind, wildfire and severe convective storm risks remain in focus for many carriers.

It added that upcoming model changes will further impact their views.

“Natural catastrophe focused MGA/MGUs will be looking to manage this volatility in order to stabilize their capital base,” the report continued.

As previously reported, several cat-focused MGAs have seen retrenchment from a number of their carrier partners in recent months after heavy 2021 losses including Uri and Ida.

That has led some to significantly reposition their portfolios in a bid to lower PMLs and manage down line size.

In its commentary, CRC also said that excess placements are evolving because of inflationary concerns around labor and supply shortages.

And it said that difficult classes where carriers continue to pursue underwriting discipline include heavy manufacturing, wood products, recycling, food processing, frame habitational, and any risk with sub-par loss experience.