The property/casualty insurance industry is confronting challenging claims dynamics, with rising frequency and severity of claims despite decreases in economic inflation, according to Swiss Re.
The pace of claims growth in the liability line of business challenges the insurability of those risks, said Swiss Re’s sigma report titled “Risks on the rise as headwinds blow stronger: global economic and insurance market outlook 2024‒25.”
“Liability lines comprise the majority of P&C industry reserves, and the adequacy of reserves after the inflation surge is emerging as a key risk,” the report said, noting that reserves in the US for lines “such as commercial motor and certain general liability categories are already viewed as deficient.”
Swiss Re anticipates further hard market conditions in 2024 at least, with the P/C segment expected to see 3.4% real premium growth globally in 2023, stronger than the forecast for 2024‒25 of 2.6%. “This reflects a significant repricing of risk, especially in claims-impacted lines.”
Nevertheless, the economic growth slowdown and elevated geopolitic