Insights from Mike Prindle, Head of Complex Property at CAC Specialty, on the Challenges, Profits and Projections in the 2023 P&C Insurance Landscape

Mike Prindle, Head of Complex Property at CAC Specialty, shares valuable industry perspectives on the challenges faced by buyers in 2023, factors influencing a potentially profitable year for insurers, and projections for CAT Treaty renewals in 2024.

Additionally, his insights were recently shared in Digital Insurance’s Trends to Watch in 2024 – Property and Casualty Insurance.

How would you describe the property market in 2023?
Mike Prindle: This year was incredibly challenging for buyers. After experiencing five years of rate and retention increases, 2023 marked the toughest property market in over two decades.

What factors contributed to a potentially profitable year for property insurers in 2023 despite a relatively benign hurricane season?
Prindle: The 2023 hurricane season was benign and there was increased investment income due to rising interest rates. These factors are expected to contribute to a profitable year for most property insurers.

What can buyers expect in terms of stability for CAT Treaty renewals on January 1, 2024?
Prindle: CAT Treaty renewals on January 1st, 2024 were more stable than in 2023, providing increased capacity for buyers and oversubscribed programs in many cases. Rate increases are also expected to moderate moving into 2024.

What challenges are foreseen for attritional loss and heavily CAT-exposed risks in 2024?
Prindle: Attritional loss and heavily CAT-exposed risks will continue to face many challenges in 2024. The release of a new CAT model by RMS is expected to impact hurricane results for Florida and Gulf Coast exposure at the portfolio level which could keep CAT capacity constrained for buyers in 2024.

How has the issue of adequate replacement cost valuation evolved, considering the changes in inflation and values over the last three years?
Prindle: Adequate replacement cost valuation remains a topic of discussion, although it has somewhat subsided due to the reduction in inflation and the right-sizing of values that buyers have been forced to address over the past three years.

What is the prevailing sentiment among customers regarding property insurance?
Prindle: Customers are experiencing a high level of “buyer fatigue” with property insurance. Five years of rate increases have forced buyers to increase deductibles, accept SIRs, or purchase fewer CAT limits in order to control costs.

How are insurers adapting to customer expectations in this challenging market?
Prindle: During a challenging market cycle, I would argue that customers/brokers are adapting to insurer expectations. Accurate valuation, improved loss control, good submission data and proactive risk management are all important to attract cost-effective capacity.

What factors are considered essential for a successful property renewal, particularly for brokers?
Prindle: Submission data quality and integrity are paramount for a successful property renewal. As a broker, pre-underwriting and defining a clear and concise marketing strategy based on a client’s risk tolerance are key components of success. Early and often communication with clients is necessary to avoid any last minute surprises.