Discussing Trends in Property Rate (conversation copied directly from the below email):

Question 1

The property market conditions that were in place throughout 2018 are still in place and continue to drive the need for increased property rates in 2020. A useful example of independent confirmation of current property market conditions comes from Conning, Inc. They highlighted …

Answer 1

on the first page of their year-end 2018 Commercial Property Report that, “The back-to-back nature of the 2017 and 2018 elevated catastrophe years is expected to produce upward pressure on commercial property pricing in 2019.”

Question 2

We know that your conversations with your clients describing the reasons behind the rising costs of commercial property insurance may be challenging, especially with customers who …

Answer 2

did not suffer property losses in 2018. To help with these conversations, Travelers has a couple of updated resources:

Question 3

1. The conversation starter,

Answer 3

“6 Commercial Property Drivers That Create the Perfect Storm”

Question 4

2. Insurance to Value sell sheet (CP-6487) which includes …

Answer 4

current building material price and construction cost trends

Question 5

Importantly, we want to draw your attention to key numbers behind three trends driving property rates that you will find helpful:

Answer 5

One – Historic insured catastrophe losses in 2017 and 2018 have reached $234 billion (Insurance Journal – 1/19): Estimates for 2017 have now reached $144 billion and early estimates for 2018 insured cat losses are already ¬$90 billion.

Question 6

Two

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Two – Reinsurance rates are projected to trend higher: Two consecutive years of major catastrophes are driving retrocessional reinsurance costs higher. Reinsurance costs are expected to increase for both treaty and facultative reinsurance.

Question 7

Three

Answer 7

Insurance to Value: Continued attention to insurance to value is important. Recent pricing indices support the need to increase values regularly just to keep pace with rising repair and replacement costs. Costs for building materials, labor and equipment costs are all up.

Question 8

And remember, take a moment during these pricing conversations to describe our outstanding value-added property services including:

Answer 8

• Catastrophe Response – powerful customer testimonials about recovery from a catastrophe https://www.travelers.com/claims/catastrophe-response/index.aspx
• Business Continuity Planning resources – available to customers on the Travelers Risk Control Customer Portal and additional quick reference material on business continuity planning are available in the Prepare and Prevent section of Travelers.com https://www.travelers.com/resources/business-continuity/index.aspx

Question 9

What are your thoughts about the above comments and will the information help you influence your customers that …

Answer 9

property rate is needed and in line with the marketplace?