The 2015 financial results showed another good underwriting year across the insurance industry. The Insurance Information Institute (I.I.I.) is projecting an overall calendar year combined ratio of 95.2 and the insurance industry finished 2015 in very strong shape with a near-record high $670B in policy holders’ surplus. From a casual observer’s perspective, the insurance market continues to provide sound results.

From an underwriter’s perspective, the commercial insurance market continues to soften through lower prices and broader terms. The commercial insurance market consists of close to 60% Casualty and 40% Property premiums. Digging deeper into the I.I.I. results by line, it is not surprising to see increasing loss ratios on various lines of business, specifically Casualty lines. ISO/PCI data is showing the combined ratio deterioration is driven by a 1.2% increase in frequency and a 5.5% increase in severity losses. As a result, loss ratios are tipping into the unprofitable level on many lines of Commercial Casualty business and could eventually push overall Property and Casualty combined ratios into the red.

Many markets are specifically reporting significant adverse loss history in auto and tough products lines of business. In fact, some carriers have recently decided to exit the Transportation and heavy Casualty business due to loss ratios above acceptable levels.

If you have concerns within your Casualty book of business or would like to discuss profitable ways to share risk across all classes of Casualty business including Auto, General Liability and Medical Malpractice, please give us a call. Our Casualty Facultative underwriters work with a broad spectrum of insurance companies across the United States and we are happy to discuss specific exposures or general Casualty concerns and needs.