US P&C renewal premiums accelerating Q2 on broad price gains: Gallagher
US property and casualty renewal premiums are rising in the second quarter at a pace to beat Q1 and 2022, sufficient to convince insurance broker AJ Gallagher that it can edge out guidance for organic growth issued just seven weeks ago.
“We continue to see price increases across nearly every line globally,” CEO J Patrick Gallagher told analysts and investors during a call.
Volumes and exposures also speak to strong demand from insureds. “We are not seeing indication of meaningful economic slowdown within our data,” he said of the read from daily data flow on new business sales, renewals, policy endorsements and cancellations.
Combining price with exposure, total renewal premiums are on an accelerated pace. April and May have renewal premiums 11% above the prior year pace, above the 9% reported in Q1 and the 8-10% growth rates Gallagher had claimed to see during 2022. “Most” of Gallagher’s major geographies have accelerated from Q1 and lines including property, commercial auto, general liability and workers’ comp are all up. Much-discussed weakness in D&O is “more than offset” by other lines.
“We aren't seeing and don't expect a meaningful slowdown in primary premium,” he said.
The market strength prompted Gallagher to firm its forecast for organic growth in 2023. Gallagher had previously said 7-9% growth across its full scope of business lines and now feels more strongly about the upper end of that range. The key US insurance operations expect organic growth at 13%, above prior indication of 12-13%.
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