Q2 2024: Commercial Insurance Market Sees Softening Conditions

The U.S. commercial insurance industry experienced softer market conditions in the second quarter of 2024. The drop in premiums from Q1 to Q2 highlights the impact of increased competition in the commercial insurance market. According to the CIAB Quarterly Survey, the average premium rate across all lines fell by 2.1%, with some lines experiencing even more significant reductions. The average premium increase slowed to 5.2% in Q2 2024, which is the first time premium growth fell below 6.0% in 5 years. The $50+ billion insurance premium finance industry is closely correlated to the commercial insurance market. Given the decrease in average premium growth, select industry players in the insurance premium finance market experienced slower growth in annual outstandings.

Despite this overall decline, the drop wasn’t consistent across all sectors. High-risk categories, especially those involving U.S. casualty exposures, saw a mix of smaller decreases or slight increases due to ongoing concerns over reserve adequacy and rising litigation costs. The disparity in premium changes across different lines underscores the nuanced dynamics within the market, where competitive pressures are influencing pricing but not uniformly across all areas​.