The U.S. property/casualty (P/C) industry recorded a $32.2 billion net underwriting loss in the first nine months of 2023, $7.6 billion worse than the underwriting loss posted in the same prior-year period, according to a new AM Best report. These preliminary results are detailed in a new Best’s Special Report, titled, “First Look: Nine-Month 2023 US Property/Casualty Financial Results,” and the data is derived from companies whose nine-month 2023 interim period statutory statements were received as of Dec. 4, 2023, representing an estimated 99% of total industry net premiums written and 98% of policyholder surplus. According to the report, losses in the personal lines segment was main driver of the P/C industry’s combined ratio of 103.4 for the nine-month period, a 0.7-percentage-point deterioration from the same period in 2022. Catastrophe losses accounted for an estimated 9.8 percentage points on the nine-month 2023 combined ratio, up from an estimated 7.3 points in the first nine months of 2022. The P/C industry saw net earned premium growth of 9.7% and a 2.2% decline in policyholder dividends in the nine-month period; however, these were countered by a 11.9% increase in incurred losses and loss adjustment expenses (LAE) to $476.4 billion and a rise in other underwriting expenses. With earned net investment income virtually equivalent to the prior-year period at $51.4 billion, the underwriting loss drove pre-tax operating income down 28.4%, to $19.9 billion. A $50 billion change in net realized capital gains at National Indemnity Company resulted in net income for the industry more than doubling to $65.7 billion. To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=338477.

Hiscox, the international specialist insurer, reveals the median cost of cyber-attacks has decreased for U.S. small businesses from $10,000 in 2022 to $8,300 in 2023. The annual Hiscox Cyber Readiness Report, which gauges businesses’ preparedness to combat cyber incidents and breaches, surveyed over 5,000 professionals responsible for their company’s cyber security strategy from the USA, UK, France, Germany, Spain, Belgium, Republic of Ireland and The Netherlands. Key findings specific to the more than 500 US small business professionals surveyed include:

• Small businesses are aware of the cyber risk: Small businesses see cyber as a real threat. Thirty-three percent of US small businesses consider cyber risk high or very high, which is ahead of economic issues and competition.
• The cost of cyber-attacks has dropped: The median cost of cyber-attacks for one business in a year is approximately $8,300, down from about $10,000 last year. Although the cost is down, the median number of attacks has risen from 3 in 2022 to 4 in 2023.
• Ransomware is costing small businesses in a big way: US small businesses paid over $16,000 in cyber ransoms over the past 12 months. For businesses that paid ransoms, only half (50%) recovered all their data and 27% of the time, hackers made additional demands for money.
• Phishing is still the primary point of vulnerability: In ransomware attacks, the most common points of entry were phishing (53%), unpatched servers/VPN (38%), and credential theft (29%).
• While IT security spending has increased, there are still areas of vulnerability: Despite a 10% increase in median IT budgets and a 24% increase in cybersecurity spending over the last 12 months, 59% of small businesses don’t use security awareness training. Further, 43% of the businesses surveyed don’t have network-based firewalls.
• Small businesses are protecting themselves: 53% of US small businesses have either a standalone cyber insurance policy or have cyber coverage through another policy.
• When it comes to cyber maturity, there is more work to be done: For all sizes of business, the US ranks second (behind France, 2.98) for cyber maturity with a score of 2.94. When it comes to cyber expertise, 63% of small businesses in the US are intermediates and only 4% are cyber experts.

“In the never-ending arms race of cyber criminals versus cyber security, new technology developments and employee training can tip the scales either way,” said Chris Hojnowski, Vice President and Product Head of Technology and Cyber for Hiscox in the US. “Phishing is still the most common point of entry for ransomware attacks, and new developments like AI can undermine our tried and trusted ways of spotting a phishy email. Proactivity is the best form of defense when it comes to cyber, and a team is only as strong as the weakest link - or least-trained employee - in the chain.” About the Study Hiscox commissioned Forrester Consulting to gather information about businesses cyber activities and readiness. In total 5,005 professionals responsible for their company’s cyber security strategy were surveyed (over 900 each from the USA, UK, France and Germany; more than 400 from Spain; and 200-plus from the Belgium, Republic of Ireland and The Netherlands). Respondents completed the online survey between 9 January 2023 and 2 February 2023. We have adopted median rather than mean or average figures and restated prior-year figures in the same terms. Given the extreme variation in the underlying figures between the smallest and largest firms, this provides a more accurate representation of the respondents as a whole.    

Authorities say Dallas County was scammed out of $2.4 million in a fraudulent wire transaction. The county became aware of the fake payment Nov. 17 and immediately began an investigation, according to a statement by County Administrator Darryl Martin. The county has since turned over its investigation to the FBI. “It appears the criminal used a fraudulent business email impersonating one of our partners and engaged in social engineering,” Martin’s statement said. Martin said the incident isn’t related to an October cyberattack that resulted in hundreds of pages of county information being posted on the dark web. “Remedial measures” are being taken, he said. When asked for clarity and further explanation, he told The Dallas Morning News he couldn’t comment further. County commissioners are expected to discuss a security audit for the department who authorizes payments, the auditor’s office, in executive session Tuesday. The county has been tumbling from one technological woe to another this year, costing taxpayers millions. The county has been grappling with these crises without a director of its information technology department since July. In January, the county auctioned off thousands of old laptops that still contained personal information, including Dallas County Sheriff’s Department data on criminal cases. In April, the auditor’s office updated its financial management system, leading to paralysis in many processes throughout the county. Thousands of employees weren’t paid on time, and some waited months to get accurate information on time and pay accrual and retirement allocations. Child support payments had to be corrected. Thousands of vendors weren’t paid on time for contract work, and invoices continue to be rectified. David Leininger, who is an independent consultant and former interim president/executive director and chief financial officer for Dallas Area Rapid Transit, called the software rollout “one of the worst that I’ve encountered.” In May, courts, prosecutors and attorneys got a new criminal case management system, but migration to the new system has been rocky. The local criminal justice system is still suffering. Prosecutors, public defenders and the county probation office have had limited access to the county’s criminal case files. There have been difficulties with processing grand jury referrals and indictments, and authorities have had problems tracking inmates at the county jail. In October, hackers accessed Dallas County’s network. While the county’s cybersecurity was able to detect and kick out the hackers before they shut down the system, the cybercriminal group known as “Play” was able to steal data — mostly criminal case information accessible through public records requests — and posted it on the dark web. The office of County Judge Clay Lewis Jenkins did not respond to a request for comment. Cal Jillson, a Southern Methodist University political science professor, said the issues facing the county make him question the county’s management and hiring practices. He said if the county increased its pay scales for IT positions, it might attract more qualified candidates. “I think there are obvious management shortfalls,” he said. “It looks on some of these issues as if it is a lack of expertise and then a lack of contract negotiation that provides for the training that is inevitably needed.” He believes voters could take their frustrations out at the ballot box. “If they discover inefficiencies, overpayments and those kinds of things, it always looks bad, because voters love tax cuts that limit revenues into government,” Jillson said. “Then when government can’t perform flawlessly on their contracts or service delivery, the natural thing for a taxpayer to do is to cut them out.”    

Private equity-owned insurers increased their stake in the industry’s admitted assets in 2022 by more than 15% on a year-over-year basis, according to a new AM Best special report. In its Best’s Special Report, “Private Equity and Investment Managers Continue to Enter Life/Annuity Market,” AM Best states that outside capital was active in entering the life/annuity segment in 2022, which helped private equity (PE)-owned insurers increase their share of admitted assets. This was driven by strong annuity premium growth at select companies such as Athene and Global Atlantic. However, the report notes that high profile acquisitions in the segment also contributed to the increase and that the deal momentum has continued into 2023. According to the report, the traditional strategy of private equity firms targeting tactical opportunities has for the most part been abandoned. The more recent model incorporates variations of majority ownership of the insurance partner and oversight of the group’s investment portfolio. “This approach is not exclusive to private equity firms, as investment managers are also actively participating now,” said Jason Hopper, associate director, AM Best. “The consistent cash flows and assets that insurance companies provide appeal to asset managers with longer-term goals.” The operating environment has also changed since 2009, when Apollo created Athene, which grew into an entity that others tried to replicate. Interest rates had remained low for more than a decade, but that has changed since March 2022 and the pricing environment and credit cycle are quite different now. The report underscores that acquiring and partnering with life-annuity insurers is a long-term play. The ownership structure does not dramatically alter the risk profile as much as the insurance company’s strategic plan and activities. Cash flow and manageable premium growth remain critical, as well as proper asset-liability management and enterprise risk management. “Capital providers who are impatient and lack a long-term focus will be unable to achieve their business goals,” said Ed Kohlberg, director, AM Best. “New market participants will need to understand the long-term nature of the segment and be prepared to provide the appropriate customer and capital support for the underlying business.” To date, PE firms have demonstrated their willingness and ability to support the insurer’s growth strategy. Roughly 70% of the PE insurers rated by AM Best have a Long-Term Issuer Credit Rating of “a-” (Excellent) or higher; only two companies have a similar rating of “bbb-” (Good) or lower. Also, the balance sheet strength of a majority of PE-owned insurers rated by AM Best is in the two highest categories; none have balance sheet strength assessed as weak or very weak. To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=338330.    

U.S. employers are planning an overall average salary increase of 4.0% for 2024. That’s according to the latest Salary Budget Planning Survey by WTW, a leading global advisory, broking and solutions company. Though down from the actual average increase of 4.4% in 2023, the numbers remain well above the 3.1% salary increase budget in 2021 and years prior. Inflationary pressures (55%) and concerns over a tight labor market (52%) are the primary influencing factors behind salary increase budgets, both cited by over half of employers surveyed. “Though economic uncertainty looms, employers are looking to remain competitive for talent, and pay is a key factor.” - Hatti Johannsson | Research Director, Reward, Data and Intelligence, WTW Yet, inflation is slowing down from the highs of recent years, and the labor market is shifting, with voluntary turnover and attrition at 11% overall. While still a common concern, fewer organizations are reporting issues with attraction and retention, down from 60% in 2022 to 48% currently. “We are seeing healthy salary increases forecasted for 2024,” said Hatti Johannsson, research director, Reward, Data and Intelligence, WTW. “Though economic uncertainty looms, employers are looking to remain competitive for talent, and pay is a key factor. At the same time, organizations should remember pay levels are difficult to reduce if markets deteriorate. It’s best to avoid basing decisions that will have long-term implications on their organization on temporary economic conditions.” Still, employers seek to strike a healthy balance within their total rewards packages. Non-monetary actions are a big focus for employers looking to attract and retain. At most organizations, these include more workplace flexibility (63%); broader emphasis on diversity, equity and inclusion (60%); and improving the employee experience (55%). Additionally, most employers have committed to hiring staff in a higher salary range (55%), undertaking compensation reviews of specific employee groups (54%) and raising starting salary ranges (49%), which could also be seen as a reflection of the increased emphasis on pay transparency. Organizations also report moving toward greater work flexibility, as over half (55%) of employers offer a choice of remote, onsite or hybrid working, while 31% offer a flexible work schedule. As this trend grows, some companies are changing rewards in line with remote working: 13% of employers have taken action or are planning to change allowances, 10% of employers have or are planning to change benefits, and 11% have or are planning to adjust base pay. “With ongoing uncertainty, especially around pay transparency, we see organizations do better where there is a foundational level of understanding among all employees – on the compensation philosophy, the program design and how decisions about pay are made. Compensation is a sensitive topic and often managers feel uneasy when it comes to talking about pay. Our research shows the most commonly cited barrier to organizations communicating more openly about pay is the fear of employee reactions. We recommend training for managers on their role, how the compensation program works, and how to communicate it effectively. Improving the pay conversation goes a long way in improving the overall employee experience and further stabilizing the workforce,” said Sara Vallas, senior director, Employee Experience, WTW.

About the Survey

The Salary Budget Planning Report is compiled by WTW’s Reward Data Intelligence practice. The survey was conducted in December 2023. Over 33,000 responses were received from companies covering over 150 countries worldwide.    

Woodruff Sawyer, one of the largest independent insurance brokerages in the US, announced today the release of the 2024 Property & Casualty Looking Ahead Guide. Inflation—both economic and social—continues to contribute to premium increases in the P&C insurance market, and rising reinsurance costs due to severe weather events have led to higher property costs. Woodruff Sawyer, however, does not expect significant rate increases in 2024—most buyers should see single-digit percentage increases, similar to what they saw in 2023. Download the Guide The 3 most crucial factors impacting P&C premiums are inflation, more frequent and severe catastrophic losses, and reinsurance costs. The combination of decelerating inflation and higher investment portfolio yields will improve insurer results, which should result in more favorable premiums but will not likely materialize until later in 2024.  In response to climate and catastrophic loss, expect insurers to place greater scrutiny on resilient building materials and construction practices. Finally, reinsurers have responded to catastrophic events by increasing premiums, adding more restrictive terms and conditions, and requiring insurers to retain more catastrophic loss. At the same time, the outlook for casualty in 2024 remains challenging. The hard market for primary liability is back due to litigation activity, backed by an increasingly aggressive plaintiffs’ bar. By contrast, the workers’ compensation (WC) trend noted in 2023’s Guide, holds the greatest potential for rate reductions. Given the challenges on primary and umbrella liability renewals, it’s critical that insurance buyers seek opportunities to leverage their WC programs to push insurers to provide optimal pricing for holistic casualty programs. Carolyn Polikoff, Commercial Lines President notes, “Each year, Woodruff Sawyer’s P&C Looking Ahead Guide provides clients with expert-sourced guidance regarding expectations for the upcoming year, forecasting premiums and actionable steps to mitigate risk for buyers. In all types of insurance markets, it’s crucial to have a knowledgeable and trusted insurance broker by your side to navigate your risk mitigation options. We’re here to help guide you through the ever-changing insurance landscape and ensure your peace of mind.” For deeper insights, advice, and our predictions for the property and casualty landscape in 2024, download the 2024 P&C Looking Ahead Guide.

About Woodruff Sawyer

As one of the largest independent insurance brokerage and consulting firms in the US, Woodruff Sawyer protects the people and assets of more than 4,000 companies. We provide expert counsel and fierce advocacy to protect clients against their most critical risks in property and casualty, management liability, cyber liability, employee benefits, and personal wealth management. An active partner of Assurex Global and International Benefits Network, we provide expertise and customized solutions where clients need it, with headquarters in San Francisco, offices throughout the US, and global reach on six continents. For more information, call 844.972.6326, or visit woodruffsawyer.com.

Ivans® today announced the November 2023 results of the Ivans Index™, the insurance industry’s premium renewal rate index. Year over year, all major commercial lines experienced increasing average premium renewal rates. Month over month, Commercial Auto, BOP, Umbrella and Workers’ Compensation experienced increases in premium renewal rate change, while General Liability and Commercial Property saw a decrease. Premium renewal rate change by line of business for November 2023 highlights include:

• Commercial Auto: 9.19%, up from 8.52% last month.
• BOP: 8.87%, up from 8.77% at the end of October.
• General Liability: 5.65%, down slightly from 5.67% the month prior.
• Commercial Property: 9.93%, down from 10.42% in October.
• Umbrella: 6.33%, up from 6.22% the month prior.
• Workers’ Compensation: 0.15%, up from -1.26% last month.

Released monthly, Ivans Index is a data-driven report of current conditions and trends for premium rate renewal change of the most placed commercial lines of business in the insurance industry. Analyzing more than 120 million data transactions, the Ivans Index premium renewal rate change measures the premium difference year over year for a single consistent policy. Inclusive of more than 38,000 agencies and 600 insurers and MGAs, the Ivans Index is reflective of the premium rate change trends being experienced by all agencies and insurers across the U.S. insurance market. Ivans Index is available to agencies and insurers as part of Market Insights at markets.ivansinsurance.com. Download the complete Q3 Ivans Index report.    

Natural catastrophes will once again break several loss records in 2023. A high number of low-to-medium-severity events will aggregate to insured losses of more than $100 billion in 2023, estimates Swiss Re Institute, with severe thunderstorms (severe convective storms, SCS) being the main contributor. It is the first time ever that severe thunderstorms have caused this level of loss for the industry. Jérôme Jean Haegeli, Swiss Re's Group Chief Economist, says: "The cumulative effect of frequent, low-loss events, along with increasing property values and repair costs, has a big impact on an insurer's profitability over a longer period. The high frequency of severe thunderstorms in 2023 has been an earnings' test for the primary insurance industry." Losses from severe thunderstorms have steadily increased by 7% annually in the last 30 years. 2023 marks an increase of almost 90% compared to the previous 5-year average ($32 billion), and more than doubles the previous 10-year average ($27 billion). Increased losses from severe thunderstorms in the US and in Europe The US is particularly prone to SCS due to its geographical location. In 2023, the amount of $50 billion insured losses for US SCS activity was exceeded for the first time — and it is set to keep rising. The US has experienced 18 events year to date which each caused insured losses of $1 billion and above. Similarly, Europe has seen an increase in insured losses from severe thunderstorms: Italy was the most affected in 2023 as was France the year before. Italy experienced losses of more than $3.3 billion, the costliest natural catastrophe-related insured losses ever in Italy. Balz Grollimund, Head Catastrophe Perils, says: "For the insurance industry, recent events provide robust benchmarks for estimating the increasing loss trends. Nevertheless, to further progress the deeper understanding of this peril, it is important to get better insights from primary insurers on distributions of insured exposure and detailed claims data. It is equally important that insurance premiums adequately reflect the risk for the coverage provided especially also in light of increasing loss trends." 2023: Hurricanes, floods, wildfires and earthquakes While losses from the North Atlantic hurricane season remain below average in 2023 to date, hurricane Otis will likely become the costliest insured event in Mexico according to Swiss Re Institute. In New Zealand, floods and cyclones caused the costliest weather-related insured losses ever for the country ($2.4 billion), while the wildfires on Maui are estimated to become the costliest insured loss event ever for the state of Hawaii ($3.5 billion). Urban development, wealth accumulation in disaster-prone areas and inflation are key factors at play, turning extreme weather into ever rising natural catastrophe losses. Rising temperatures are further increasing the risk of severe droughts and wildfires. With 2023 expected to be the warmest year on record, the effects of climate change are becoming apparent. The earthquake in Turkey and Syria is the costliest natural catastrophe in 2023, with insured losses of $6 billion, while the Morocco earthquake was the strongest earthquake to hit the country since 1900. The disaster in Morocco also shows that rural areas are not immune to large-scale losses and need to be included in preventative efforts to improve resilience.    

Governor Ron DeSantis announced his proposed $114 billion budget on Marco Island Tuesday. He believes it will slow spikes in insurance rates. The governor’s budget proposal calls for reducing some taxes and fees on home insurance bills. The average home insurance policy now is about $6,000 in Florida. So the tax break is about 6 percent. That’s a $360 annual savings on average for those with flood and home insurance. Those with just home insurance would see a 4 percent savings. It doesn’t sound all bad until potential rate hikes are facing nearly every homeowner in Florida. Mark Friedlander with the Insurance Information Institute said, unfortunately, that the small savings is going to be outweighed by increases in insurance next year. Friedlander predicts significant increases in 2024, although not as much as in recent years. “Citizens has already been approved for a 12.1 percent average statewide increase,” he noted. Some industry experts predict some private companies could hike rates as much as 30 percent in 2024, forcing many people who own their homes to go without. The governor’s plan also calls for setting aside $107 million annually in grant money to help homeowners pay a portion of improvements to strengthen their homes against storms. “If you spend $10k, you get $5k back but. You have put out $10k,” Friedlander explained. Approved companies like Eagle Roofing and Restoration of North Fort Myers can do the work. “Whether it’s upgrading your windows or your roof-to-wall attachments, it helps in a variety of reasons and ways,” explained Gregg Martin, who owns Eagle Roofing. Insurance agents like Reid McDaniel said the improvements can save people money each year. “It could be a few hundred dollars a year or a few thousand dollars a year to over $10k a year. It really depends on the age and location and what types of features are being implemented,” McDaniel stated. The grant program is known as the “My Safe Florida Home.” “We’ve seen some clients use it, but overwhelmingly, a lot of people haven’t used it,” McDaniel said. That could be because it ran out of money. In November, lawmakers added another $176 million to refund it. “The good thing is that discount is going to stay for many years to come,” McDaniels explained. It’s not clear how the governor will pay for the property insurance relief. Democrats say it will likely come from the 1,000 state jobs he’s proposing to eliminate.

State Farm Mutual Automobile Insurance Co. is the largest global property and casualty insurer with $77.59 billion of direct premiums written, according to a new ranking by S&P Global Market Intelligence. US companies dominated the top 50 nonlife insurers, taking 20 of the global spots and accounting for more than 40% of total premiums. China accounted for the next-largest share of premiums, at 12.4%, and it is also home to the world's second-largest property and casualty (P&C) insurer: The People's Insurance Co. (Group) of China Ltd. Buoyed by the US, North America dominated the top 50 list, accounting for almost 46% of premiums globally. European companies accounted for 33.5%, while Asia represented 20.7% of premiums. Difficult conditions The global P&C insurance industry is facing one of the toughest operating environments in recent memory. Geopolitical, macroeconomic and environmental instability are conspiring to push up claims costs and make investment returns unpredictable. "At least in my insurance career, the amount of challenges that are coupled together is pretty unprecedented," Nathalia Bellizia, global leader for insurance corporate finance and strategy at Boston Consulting Group (BCG), said in an interview. The difficult trading conditions are prompting companies to make big changes. In May, table topper State Farm's California subsidiary stopped writing new P&C policies in the state, except for personal auto coverage. The insurer said it made its decision because of "historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market." These challenges appear to be dragging on, with no signs of easing on the pricing front. Reinsurers have been raising prices and shrinking coverage throughout 2023, leaving insurers with more risk and volatility. Natural catastrophes are becoming more frequent and severe every year, which will result in reinsurance costs continuing to rise. "I can't see that increasing trend dissipating anytime soon," Mohammad Khan, partner and head of general insurance at PwC in the UK, said in an interview. As growth in premiums allows insurers to afford the increase for now, the question is how long this will continue as "reinsurance prices are rising faster than insurance prices generally around the world," Khan said. Room for improvement For the most part, the insurance industry has weathered the difficult operating environment. "You see the industry actually proving to be quite resilient and delivering return, on average, close to its cost of capital across the board," Bellizia with BCG said. In personal lines, insurers have struggled to charge adequate premiums, particularly in the US, where pricing is regulated by state. The challenges in this segment have been "a lot more acute" than in commercial lines, Bellizia noted, adding that double-digit rate increases are now earning in, and combined ratios have started to fall. There is still room for improvement. As reinsurers have pulled back cover, insurers are paying more attention to what their underwriting looks like without taking reinsurance benefits into account. "The use of data and technology and modeling becomes even more important," Guru Johal, lead partner for global specialty and reinsurance markets at Deloitte, said in an interview. There is an appreciation in the industry about the need for better modelling for risks such as man-made catastrophes and cyber, Johal said. Buyers and sellers The challenging conditions are focusing top executives' minds on the types of business they want to keep or discard, providing fuel for M&A. Those with a lower appetite for earnings volatility may want to exit high-risk, high-return areas such as reinsurance, as American International Group Inc. did with its sale of Validus Holdings' treaty reinsurance business to RenaissanceRe Holdings Ltd. "In a period where there is greater uncertainty, there is always more change within what global insurers will write and the composition of their portfolios," Khan said. Equally, companies will look to expand the areas they have decided to keep. Rising geopolitical tensions, fueled more recently by the outbreak of the Israel-Hamas war, may slow down acquisitions, Isabelle Santenac, global insurance leader at EY, said in an interview. Any pause is expected to be short-lived. "If it's slowing down, it will be temporary because … all the clients I have talked to in the last few months, all are discussing about inorganic growth," Santenac said. M&A is likely to increase in 2024, as "there's some pent-up demand," Johal added. While the level of global upheaval is making the going tough for property and casualty insurers, it is also serving as a reminder to their customers why they buy insurance. "I don't see volatility in the world reducing at the moment. That results in insurance being more relevant," Johal said.    

AM Best is maintaining its stable market segment outlook on the U.S. commercial lines insurance for 2024, citing in part the segment’s persistently strong underwriting results throughout the pandemic and amid substantial economic and capital markets volatility. Admitted commercial lines carriers in aggregate remain disciplined about risk selection, terms and conditions, and capacity deployment, according to the new Best’s Market Segment Report, “Market Segment Outlook: U.S. Commercial Lines.” The report notes further evidence in the form of continued strong submission flow and growth in the non-admitted/excess and surplus lines (E&S) market. Sharply higher fixed-income re-investment rates have begun to significantly bolster operating profitability in virtually all commercial lines, especially longer-tailed casualty. “Pricing momentum remains positive for most classes of business, with the notable exception of workers’ compensation and certain management liability classes,” said Alan Murray, associate director, AM Best. According to the report, reserve development from prior period exposures is expected to be favorable overall for commercial lines, although at lower levels than in the past few years. However, expected reserve development from prior period exposures will vary widely by line of business. AM Best is citing several near-term concerns that could affect the U.S. commercial lines segment. Chief among them is that economic inflation remains stubbornly elevated, despite central bank actions to moderate. Also, social inflation, including jury awards and litigation costs, continue to rise, affecting loss costs in the casualty lines of business. Domestic and geopolitical risks, including congressional gridlock, are noted as factors that have the potential to sharply heighten commercial and economic risks relevant to the U.S. property/casualty commercial lines segment. The stable outlook on the U.S. commercial lines segment reflects AM Best’s expectation that the segment will remain profitable in aggregate and will be resilient in the face of near- and longer-term challenges. It also reflects that the risk-adjusted capital for the majority of segment carriers will remain sound. In addition, the outlook reflects the stable outlooks on the commercial property and workers’ compensation lines, as well as the positive outlook for the excess & surplus lines market. To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=338279 .  

PUA University is holding a free webinar, Thursday, December 7, 3pm to 4pm EST/12pm to 1pm PST, on “Managing Construction Phase Services Risks.” The webinar is ideal for agents and brokers who handle the key risks that arise from construction phase professional services. Register here. In this webinar by J. Kent Holland of ConstructionRisk, LLC, we will provide an overview of common claims and how to avoid them, construction site safety basics and best practices for managing specific risks. EARN CE CREDITS This webinar includes one hour of CE credit for all licensed architects and engineers that attend (does not apply to insurance agents). Learn how to identify, address and manage key risks that arise from construction phase professional services, including risks from:

• Requests for information
• Shop drawing reviews
• Change order reviews
• Various types of certifications, including payment, final completion, contractor compliance and lenders
• Evaluating contractor performance
• Job site safety

You can register here.