Gallagher CEO calls rate increases justified
The current rate increases in the insurance sector are justified, Arthur J Gallagher CEO J Patrick Gallagher, Jr., said during the broker’s first quarter 2018 results conference call.
Property and commercial auto are seeing the largest price increases up 3 percent to 5 percent, casualty and specialty lines are "flat up 2 percent" while workers' comp is "flat to down about a point," he said.
“Property casualty insurance pricing in Australia, New Zealand is in the mid-single digit range with strength across all classes. Our UK and Canadian operations are seeing a flattish pricing environment while rates in our London specialty operations seem to be nearing a bottom,” Gallagher, Jr. said.
Prices are mostly up in hurricane-related property and some cat-hit property is up around 10 percent, Gallagher, Jr. said. Prices for risks that are not cat exposed and didn't burn the market, are seeing rates up between 3 percent and 5 percent, he added.
“When you think about where the rates were pre-hurricanes, they were as low as they've been in over a decade. So I do think that the rate increases are justified, they are selling in the market now,” Gallagher, Jr. said.
“I don't see a return to a vast soft market anytime quickly,” Gallagher, Jr. commented. But at the same time, he believes that once the balance sheets have had a chance “to heal a little bit and the wind doesn't blow,” rates may come down again.
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