CHICAGO, Oct. 16, 2017 /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 US homeowners'
insurance premiums for 2017 despite a decreasing return on equity
for insurers.
The report reveals that US homeowners' premiums increased from
USD89 billion in 2015, to
USD91 billion in 2016, and are
expected to reach USD93 billion in
2017.
The study highlights that the top 20 US homeowners' insurers
secured an average countrywide rate increase of three percent
during the 18 months to August 2017,
with the highest average rate increase of seven percent being
achieved in the states of Texas
and North Carolina.
Meanwhile, Florida insurers
achieved an average rate increase of five percent during the
period, which will likely be insufficient to maintain their current
ROE levels given the increased costs facing the state's carriers
from benefits and claims adjustments.
According to the report, prospective 2017 after-tax
return-on-equity (ROE) for US homeowners' business was 4.5 percent
on a countrywide average (2016: 6.7 percent), and 9.1 percent
excluding the state of Florida.
Challenges to the ROE projections include a slowdown in
insurers' rate increases against a backdrop of loss and expense
inflation, and an increased A.M. Best capital charge resulting from
insurers' premium and exposure growth – which is currently being
offset by reduced reinsurance costs.
Greg Heerde, Head of Americas
Analytics for Aon Benfield, said:
"Given the year-on-year increase in premiums, US homeowners'
insurance can be considered a growth engine within the industry.
However, we continue to monitor this line business carefully, as it
is difficult to say at this stage whether insurers' approved rate
increases will be sufficient to match their loss and expense
inflationary pressures of the future."
Parr Schoolman, Head of Aon
Benfield's Risk and Capital Strategy team, added: "Using
advanced data and analytics, we are continuing to develop tools and
services that provide clients with insight, at a granular level,
into which homeowners' risks are most likely to be profitable and
are in alignment with their overall capital strategy."
Developed by Aon Benfield Analytics and updated annually, the
Homeowners' ROE Outlook report provides a comprehensive analysis of
the US 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 US
homeowners' insurance groups by state.
To view the 2017 Homeowners' ROE Outlook report, please click on
the following link: http://aon.io/2017-homeowners-roe-outlook
Further information
For further information please contact Andrew Wragg (+44 207 522
8183 / 07595 217168) David Bogg or Alexandra Lewis
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SOURCE Aon plc