DALLAS, Oct. 24, 2016 /PRNewswire/ -- Aon Benfield,
the global reinsurance intermediary and capital advisor of Aon plc
(NYSE:AON), today launches its annual Homeowners ROE Outlook
report, which forecasts continued growth in direct U.S. homeowners
insurance premiums for 2016 despite a decreasing return on equity
for insurers.
The report reveals that U.S. homeowners premiums increased from
USD74 billion in 2011 to USD89 billion in 2015, and will rise to a
projected USD91 billion for 2016
given prospective rate activity. The study shows that homeowners
insurers secured an average rate increase of 2.0 percent during the
18 months to August 2016, with rate
decreases experienced in the states of Florida, Arizona, Indiana, Ohio, Alabama, and Alaska.
The prospective after-tax return-on-equity (ROE) for U.S.
homeowners business was shown to be 6.7 percent on a countrywide
average (2015: 8.6 percent), and 10.9 percent excluding the state
of Florida (2015: 12.6 percent).
ROEs are expected to exceed 10 percent in 34 US states – enabling
carriers to cover their cost of capital – compared to 36 states in
2015.
The report highlights that a continued decrease in reinsurance
pricing has offered insurers the opportunity to more extensively
utilize traditional and non-traditional reinsurance in their
capital strategies and pursue growth opportunities in this highly
competitive sector.
However, the negative effects of lower investment yields, higher
expenses, and an increase in the catastrophe loss ratio resulting
from updates to vendor catastrophe models, are causing insurers to
place a greater emphasis on underwriting performance and the
development of effective strategies in pricing, claims management,
marketing and risk selection.
Greg Heerde, Head of Americas
Analytics for Aon Benfield, said:
"Our study reveals that at prospective 2017 rates, homeowners
insurance provides accretive returns in the majority of states, and
opportunities exist for insurers to pursue profitable growth in the
line."
Parr Schoolman, Head of Aon
Benfield's Risk and Capital Strategy team, added: "We are
continuing to develop tools and services to help provide clients
insight, at a granular level, into which homeowners risks are most
likely to be profitable."
Developed by Aon Benfield Analytics and updated annually, the
Homeowners ROE Outlook report provides a comprehensive analysis of
the U.S. homeowners insurance sector, based on industry aggregate
state level statutory financial filing information along with rate
filings and supporting actuarial information for the 20 top U.S.
homeowners insurance groups by state.
To view the 2016 Homeowners ROE Outlook report, please click on
the flowing link: http://aon.io/2epnz2k
Further information
For further information please contact Andrew Wragg (+44 207 522
8183 / 07595 217168) David Bogg or Alexandra Lewis
Logo -
http://photos.prnewswire.com/prnh/20100719/AQ37264LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/us-homeowners-premium-set-to-surpass-90bn-for-the-first-time-according-to-annual-aon-study-300349836.html
SOURCE Aon plc