Following a profitable year for the property & casualty (P & C) insurance industry, the P & C market will be stable and competitive in 2014, according to the Wells Fargo Insurance 2014 Insurance Market Outlook released today. The report, issued by Wells Fargo Insurance, part of Wells Fargo & Company’s (NYSE: WFC) covers a wide range of product segments from workers’ compensation and employment practices, to property and technology and network security.
“We expect 2014 to be a good year for the majority of our commercial property and casualty insurance customers,” said Simon Hodge, head of the Professional Risk Group at Wells Fargo Insurance. “We anticipate significant marketplace capacity, excellent coverage quality in many areas, and do not expect a lot of pricing volatility.”
Wells Fargo’s 2014 Insurance Market Outlook – Key Findings:
Risk management concerns
Larger companies are generally prepared to resist upward rate pressure. Many have cut operating costs during the recession and increased productivity, accumulating significant amounts of cash, which enables them to assume increased retentions to offset rising rates.
The majority of these companies cited regulatory change or increased scrutiny and political uncertainty among their top concerns. Other major risk concerns include cyber security and privacy risks, volatility of global financial markets, slow recovery/double-dip recession, reputational damage, attracting and retaining top talent, emerging technologies, and terrorism.
Market capacity and the rate/pricing environment
2014 is a buyer’s market for P & C insurance. 2013’s combined rate and pricing ratio fell to 95.8 from 100.7 between January to September, with very low- to- flat rate reductions or increases expected in 2014.
Market capacity is at an all-time high for most major lines of business with market surplus at record levels. The insurance-linked securities market for catastrophe (CAT) perils such as wind and earthquake grew by 16% annually over the last three years. Alternative capacity could reach a global market share of approximately 25% by 2020 if this growth rate continues.
The complete 2014 Insurance Market Outlook is available at the Wells Fargo Insurance site. A video of Simon Hodge’s overview of the report is also available at https://www.youtube.com/watch?v=v_JYHNNJDNI.
About Wells Fargo Insurance
Recently named North America’s Best Insurance Broker by Global Finance Magazine1, Wells Fargo Insurance provides solutions for a wide range of customers, including retail consumers, high net worth individuals, small businesses, as well as middle market and large corporate customers. Wells Fargo Insurance writes or places $15 billion of risk premiums annually in property, casualty, benefits, international, personal lines, and life products and also includes the nation’s largest crop insurance provider, Rural Community Insurance Services (RCIS).
About Wells Fargo & Company
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.5 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, and the Internet (wellsfargo.com), and has offices in more than 35 countries to support the bank’s customers who conduct business in the global economy. With more than 270,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 25 on Fortune’s 2013 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially. Wells Fargo perspectives are also available at blogs.wellsfargo.com.
1 Ranking includes Wells Fargo Insurance Services USA, Inc., Wells Fargo Insurance Services of West Virginia, Inc., Wells Fargo Insurance, Inc., and Rural Community Insurance Company
This advisory is for informational purposes and is not intended to be exhaustive nor should any discussions or opinions be construed as legal advice. Readers should contact a broker for insurance advice or legal counsel for legal advice.
Products and services are offered through Wells Fargo Insurance Services USA, Inc. and Wells Fargo Insurance Services of West Virginia, Inc., non-bank insurance agency affiliates of Wells Fargo & Company.
Products and services are underwritten by unaffiliated insurance companies except crop and flood insurance, which may be underwritten by an affiliate, Rural Community Insurance Company. Some services require additional fees and may be offered directly through third-party providers. Banking and insurance decisions are made independently and do not influence each other.
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