Outlook
As per GlobalData’s Property Insurance Industry Outlook in North America in 2022 report, the impact of the COVID-19 pandemic flattened the growth in 2020. A recovery in economy and business, over H2 2020, however, stabilized the demand for property insurance. The growth is expected to remain buoyant in 2022 at 3.2% with written premiums value reaching $278.2 billion.
Owing to frequent natural disasters and wildfires in the region, Nat-Cat underwriting, and BI are expected to remain key focus areas for property insurers. This is also expected to drive the adoption of catastrophe modeling and insurtech for optimal risk underwriting over the next five years.
The use of home-telematics systems/smart home solutions is a trend that is expected to gain further momentum over the next five years in the region. The data assessed through these devices ensures a more accurate, risk-based premium pricing. Furthermore, a study of an individual portfolio’s risk exposure at the granular level allows insurers to improve customer engagement and offer a highly personalized insurance proposition.
Insurers, in collaboration with original equipment manufacturers (OEM), offer discounts on the purchase of smart home solutions. For example, Liberty Mutual Insurance introduced Dwellbeing, developed by its innovation center Solaria Labs, for its home insurance policyholders. It is a tool that monitors telematics-enabled home appliances and sends alerts.
The pandemic-led losses, coupled with increasing natural disasters, present a business opportunity for specialty insurers
According to GlobalData’s Property Insurance Industry Outlook in North America in 2022 report, the US has a strong presence of specialty insurers and presents the largest specialty insurance market. With a rise in complexity of risks, property specialty insurance is gaining traction. Specialty carriers operate in different markets on a non-admitted basis, and as excess and surplus (E&S) lines carriers. There is less regulatory pressure on E&S lines insurance, in terms of product design and pricing.
The specialty market witnessed several mergers and acquisitions and investment transactions in recent years. In 2021, the US-based insurance distribution and services company Venbrook Group acquired Alpharetta Underwriters, which offers custom-made excess and surplus insurance solutions, with a focus on construction risks. The acquisition is aimed at strengthening Venbrook’s portfolio of excess & surplus (E&S) programs.
Eight of the top 10 North American property insurers also held a place in the global top 10 rankings. Zurich Insurance Group was the only European insurer among the top 10.
The top five insurers were State Farm, The Travelers Co, Liberty Mutual Holding, Allstate Corp, and Chubb Ltd.
Access the report: Property Insurance Industry Outlook in North America in 2022.
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