While rate increases are still the norm, the report says they are not at the same level as seen in previous quarters.
"Insureds with good risk profiles and in desirable industry classes can often obtain flat to low single digit rate increases, and even the occasional rate decrease," the broker says.
However, the report continues, insureds with significant loss activity or secondary catastrophe peril exposure are frequently still experiencing high single digit to double digit rate increases, albeit rarely at the levels seen in previous quarters.
Insurers are paying special attention to clients who are unwilling or unable to substantiate replacement cost valuations, according to the report. In these cases, insurers take corrective actions in the form of prescriptive policy language (scheduled limits provisions), internal valuation adjustments that can drive rates, or capacity reductions.
Furthermore, the report discovers that insurers continue to scrutinize manuscript policy language, particularly when it comes to time element coverage extensions with no known or ambiguous physical damage triggers.
Just as pricing and coverage face challenges, capacity and retentions do as well, even though they have remained stable with no changes.
Insurers are carefully managing their capacity, primarily on accounts with significant losses, such as forest products and agriculture, as well as risks with significant secondary catastrophe peril exposure, such as wildfire or hail.
Finally, insurers' pushes for retention increases have leveled off this quarter after several quarters of insurers imposing industry and peril-specific minimum retentions – for example, $100,000 or $250,000 AOP's for frame residential, 2% for tornado/hail-prone areas, and so on.
Accounts with poor loss activity are an exception to this stabilisation because insurers believe that more corrective action is required to create a path to account profitability, according to Alliant.