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Amwins warns property insurance pricing relief could trigger valuation issues
Amwins says rising carrier competition has led some insureds to declare lower values, raising the risk of two renewal “corrections” if capacity tightens or rates firm.
A soft US property insurance market is creating a future insurance-to-value problem, Amwins warned, as competition encourages carriers and intermediaries to accept lower declared property values. Insurance Business reports that Amwins real estate practice leaders pointed to a new era of placement decisions where price has become more prominent even as questions remain about providers’ long-term support.
Amwins executive vice president Adam Terry said an influx of capacity has widened the set of options, including additional carriers, managing general agents, and facilities competing for business. Terry cautioned that focusing solely on the lowest price can be risky, because the goal should be partners that can support insureds over time.
Terry said the discipline used in the hard market, when insurers emphasized aligning property values with replacement costs, is eroding as competition intensifies. He added that the issue may not show up immediately while pricing stays competitive, but could become more visible when capacity tightens or insurers seek stronger rates, leaving policyholders whose values lag costs exposed at renewal.
On the casualty side, Amwins executive vice president Corey Alison said real estate casualty conditions remain firmer, but the pace of rate increases has moderated. Insurance Business reported Alison described the market as moving toward a more balanced environment over the past six months, with the increase range for a primary placement that avoids deterioration in existing losses or new claims narrowing from prior years.