{"id":3486,"date":"2025-05-02T14:40:46","date_gmt":"2025-05-02T14:40:46","guid":{"rendered":"http:\/\/calebdewey.com\/?p=3486"},"modified":"2025-05-05T16:30:36","modified_gmt":"2025-05-05T16:30:36","slug":"insurance-pricing-rolls-off-highs-as-market-momentum-shifts-says-j-p-morgan","status":"publish","type":"post","link":"http:\/\/calebdewey.com\/index.php\/2025\/05\/02\/insurance-pricing-rolls-off-highs-as-market-momentum-shifts-says-j-p-morgan\/","title":{"rendered":"Insurance pricing rolls off highs as market momentum shifts, says J.P. Morgan"},"content":{"rendered":"

J.P. Morgan, a financial services firm, is signalling that pricing pressure is beginning to take hold across the commercial insurance and reinsurance sectors.<\/p>\n

\"\"According to early Q1 2025 data analysed by the firm\u2019s insurance research division, the nearly eight-year stretch of consistent premium rate increases is clearly losing momentum\u2014and faster than many market participants had forecast.<\/p>\n

While a moderation in pricing was anticipated, J.P. Morgan notes that the shift is unfolding with greater pace and breadth than previously expected.<\/p>\n

The firm\u2019s review of early earnings and market commentary suggests Q1 has brought definitive signs of rate softening across both commercial and specialty lines.<\/p>\n

Commercial insurance, which saw sustained pricing momentum since late 2017, began to plateau in the second half of 2024.<\/p>\n

\n
\n

\"Download<\/a><\/p>\n<\/div>\n<\/div>\n

By early 2025, year-on-year pricing had turned negative, with global commercial rates down roughly 3%. Regionally, declines were recorded at 1% in the US, 2% in continental Europe, and a more pronounced 6% in the UK\u2014indicating that no major market is immune to the shift.<\/p>\n

The reinsurance side has also begun to reset. According to J.P. Morgan, the January and April 2025 renewals marked the first material contraction in pricing since the sector began its rebound in early 2018. Competitive pressures and improved capital availability are starting to outweigh the reserve caution and catastrophe recalibrations that defined recent years.<\/p>\n

Even so, the firm emphasises that current pricing remains well above long-term norms. Commercial insurance rates have broadly reverted to 2022\u20132023 levels, while reinsurance pricing is still hovering around 2023\u2014previously viewed as a cyclical peak. But the direction of travel is now downward.<\/p>\n

J.P. Morgan warns that sustained price erosion, even from a high base, could compress margins over time, especially given the natural lag between policy binding and premium earnings. This delay\u2014typically 12 to 24 months\u2014means that the full financial effects of lower pricing may not become visible until late 2025 or 2026.<\/p>\n

J.P. Morgan identifies major global players\u2014including Allianz, AXA, Zurich, Munich Re, Swiss Re, Hannover Re, and SCOR\u2014as most exposed to margin headwinds if rate softness accelerates.<\/p>\n

US-based carriers are also likely to come under increased investor scrutiny as the industry transitions from rate-driven revenue growth to a greater focus on operational discipline, underwriting selection, and portfolio optimisation.<\/p>\n

In response, J.P. Morgan observes that several insurers are already repositioning their business mix\u2014shifting toward more resilient lines such as cyber, casualty, and specialty risks, while scaling back capacity in areas where pricing has turned more competitive. Underwriting agility and capital discipline are expected to be recurring themes in Q1 earnings calls.<\/p>\n

Elsewhere, the firm also noted increased investor inquiries this week regarding possible insurance exposures tied to widespread power outages in parts of Southern Europe. J.P. Morgan clarified that most cyber insurance policies exclude systemic failures in national infrastructure, including electricity and water systems, meaning those losses are unlikely to fall within the scope of typical coverage.<\/p>\n

Despite these developments, carrier sentiment remains steady. In a recent earnings statement, Beazley CEO Adrian Cox said: “Our guidance for the year of mid-single digits growth and an undiscounted combined ratio of mid-80s is unchanged. The strength of our diversified product set and platform strategy means we are well positioned to take advantage of any opportunities which may arise, as pricing dynamics evolve in this active claims environment.”<\/p>\n

J.P. Morgan concludes that while industry fundamentals remain robust, the pricing backdrop is becoming more complex. Strategic recalibration will be key as insurers look to maintain profitability and manage capital in a market where pricing, once a significant driver of returns, is starting to fade.<\/p>\n

The post Insurance pricing rolls off highs as market momentum shifts, says J.P. Morgan<\/a> appeared first on ReinsuranceNe.ws<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

J.P. Morgan, a financial services firm, is signalling that pricing pressure is beginning to take hold across the commercial insurance and reinsurance sectors. According to early Q1 2025 data analysed by the firm\u2019s insurance research division, the nearly eight-year stretch of consistent premium rate increases is clearly losing momentum\u2014and faster than many market participants had […]<\/p>\n","protected":false},"author":1,"featured_media":3488,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[],"_links":{"self":[{"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/posts\/3486"}],"collection":[{"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/comments?post=3486"}],"version-history":[{"count":3,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/posts\/3486\/revisions"}],"predecessor-version":[{"id":3490,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/posts\/3486\/revisions\/3490"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/media\/3488"}],"wp:attachment":[{"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/media?parent=3486"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/categories?post=3486"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/calebdewey.com\/index.php\/wp-json\/wp\/v2\/tags?post=3486"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}