U.S. companies are paying more for insurance, a reversal after years of flat or declining rates for property and liability policies. Insurers have raised prices aggressively in the past year on companies of all sizes across the country. And they have warned price hikes are likely to continue. The turnabout underscores a challenging landscape…catastrophe losses and continued low interest rates, which have weighed on their investment returns.
Pretax operating income for the U.S. property-casualty insurance industry fell by 8% from 2014 to 2018, even as revenue from insurance premiums grew, according to ratings firm A.M. Best. Excluding investments and other income, the industry lost money from underwriting in 2016, 2017 and 2018. A retreat from some accounts and lines of business by two major insurance players, American International Group Inc. AIG 1.27% and Lloyd’s of London, has also helped drive prices higher, according to brokers and underwriters.
Texas Roadhouse Inc. was hit with price increases of more than 20% for some of its coverage.