Taking the temperature of commercial lines insurance markets in July 2020By Eric Price-Glynn | July 15, 2020
While increasing summer temperatures have pushed citizens to beaches and parks in an effort to reclaim a sense of seasonal normalcy, the COVID-19 pandemic continues to throw cold water on the prospects for a swift economic recovery.
As a result, ISO MarketStance’s July forecast shows commercial lines direct written premiums declining 2.8 percent in 2020, with the 5.5 percent decline in the composite commercial exposure base partly offset by a 2.8 percent rise in rates. Notably, market surveys have continued reflecting rising rates in many lines, despite the pandemic.
The July forecast is the first in a series of updates to the Verisk 2020 Commercial Lines Forecast, published in May. The forecast provides detailed data on which industries may experience the greatest impact to direct written premiums, how account size factors into forecasted premium declines and how the economic environment, and a potential recovery, may evolve in 2021 and beyond.
The July update allows subscribers to zero in on potential impacts to any market sector. And that’s a key point often missed when the macroeconomic story so dominates the news, as it understandably does, with continuing weekly reports of 1 million or more new unemployment claims—different commercial lines segments respond to general economic distress very differently.
For example, the non-residential lessors market will not decline uniformly—nor by as much as most other segments. Instead, pockets of the market, such as stadiums, arenas, and theaters will experience sharper declines, while other lessors risks, such as manufacturing, may even see modest growth. The variations aren’t simply in particular markets but in particular geographies as well, underscoring the need for truly granular industry and econometric data to inform strategic planning.
(To view an interactive visualization of this forecast, please click here.)