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Residual markets take more property risk as underwriting tightens
Between 2019 and 2024, the number of residential policies in state residual markets rose as traditional carriers tightened underwriting in catastrophe-exposed areas.
Heading into 2027, Coverager says insurers are facing mounting cost and regulatory pressures that are making operational efficiency and accurate risk pricing more important than ever.
The outlet reports that carriers and MGAs are fine-tuning risk selection, improving pricing accuracy, and streamlining policy processing to respond to those pressures.
Coverager also highlights a shift in how property risk is placed, saying some catastrophe-exposed areas have seen homeowners’ property coverage become harder to secure as traditional carriers pulled back or tightened underwriting.
It adds that some of that business has moved into state residual markets and other capacity sources, citing growth in the number of residential policies in state residual markets from 2019 to 2024.