At the beginning of 2021, higher surplus levels and favorable risk-adjusted capitalization helped the Personal Lines insurance sector. The segment overcame obstacles related to current conditions and returned to pre-pandemic frequency trends, navigated increased loss cost severity, and higher than average catastrophes. As we look ahead at what’s in store for 2022, the outlook for the Personal Lines insurance industry is stable, according to the ratings agency AM Best.
Analysts’ predictions are due to the segment’s underwriting actions limiting strong risk-adjusted capitalization, underwriting actions limiting volatility in the Homeowners’ line, and the rise of technology use because of the pandemic. The agency’s report also finds that with positive cash flows and favorable liquidity, the sector’s risk-adjusted capitalization levels will remain robust. Despite the positive outlook, there are still some challenges for Personal Lines insurance, including the potential for more catastrophic events, auto loss frequency returning to pre-COVID levels, and rising reinsurance costs. Keep reading to see what else is in store for the segment.
Quaker Special Risk is a premier Personal Lines wholesaler. Our experts are equipped to provide your clients with the specialized insurance coverage solutions they need to keep them protected. Contact us today to speak with an expert about their options.