E&S won’t slow down in liability, may soon peak in property: Berkley

Flows into E&S insurance channels continue without fail in liability lines and any hint of slowdown is restricted to the property sub-segments, although rate ade1uacy leaves a notable market opportunity, the top officer of US insurer WR Berkley says of his market read. 

“Momentum for liability lines continues to be as strong as ever,” CEO Bob Berkley told his company's first quarter earnings call. “To the extent you are seeing any slowing in E&S, it is likely to be property-related.” 

General liability looks “very robust” in both admitted and non-admitted channels, Berkley said, citing the lasting impact of social inflation on loss cost trend. Commercial auto is “very much in the cross hairs” of that trend and meriting a strong push for rate, he noted. 

Berkley sees a “reasonable chance” that reinsurers will step in to add pressure in liability lines with their own recognition of the threats of social inflation and a press for more reinsurance rate, he added. 

“There is nothing that leads me to believe that the momentum is going to be subsiding any time soon,” he summed.  

For broad property, hint of slowdown does not mean the end of an ongoing opportunity. Rates have been rising, are currently clearly adequate and the market’s gains may still have some legs, he said, but elements of the story are peaking. 

“There continues to be an opportunity” although the sense of urgency in the market “is probably not what it was a year ago,”  Berkley told analysts. “How quickly that will dissipate, I don't know.”

“I expect we'll try to make some more hay in property before we call it a day,” he said, “but property is peaking.” The reinsurance market reset that had driven the recent primary hardening is fading as a driver. 

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