Organizations with property exposed to catastrophic damage are paying a steep price for the many natural catastrophes that occurred during 2017.

Insurance premiums for such properties that incurred losses are up 20% to 25% this year, according to a report released on Wednesday by Willis Towers Watson. Average premium increases are 10% to 20% for exposed properties that didn’t suffer losses. Buyers are expected to face similar pricing conditions for at least several months.

Premiums are flat to 5% higher this year for non-cat-exposed properties.

Some observers had expected property insurance rates to spike even higher, although actual 2018 pricing so far is close to what Willis Towers Watson had predicted in November.

A number of market forecasts had estimated that catastrophic losses for the property insurance industry in 2017 would total about $200 billion. However, carriers’ actual reported losses and modeled results to date total only $143 billion, the consulting firm and insurance broker reports. That number almost surely will rise, with power still out for up to half of Puerto Rico.

In any case, a new record has been set for such losses, surpassing the $120 billion hit the industry suffered in 2011. Last year’s costly events included hurricanes Harvey, Irma, and Maria; two major earthquakes in Mexico; and 279 wildfires in California.

Despite the record insurance losses, capitalization is so robust in the property insurance and reinsurance industries that balance sheets have not been severely dented, according to the report. In fact, reinsurers’ capitalization actually ticked slightly higher, on average.

Still, the 2017 disasters have provided an impetus for carriers to reappraise underwriting fundamentals and rate adequacy, says Willis Towers Watson.

“Make no mistake, the marketplace is still in a state of some flux and should not be considered easy,” the report says. “While the rate increases that we’ve seen and that we predict are modest compared to some doomsday scenarios predicted a few months ago, they are still challenging for buyers. Moreover, there is some bleeding of the market-firming into other lines of insurance, which will also challenge buyers.”

However long the higher premium environment lasts, at some point pricing will moderate. “While underwriters feel compelled to increase profitability, continued oversupply of capital will inevitably militate against this desire,” according to the report.

In addition to traditional capital sources, the market for insurance-linked securities (ILS), an alternative source, continues to grow.

“Rather than running away from the losses, ILS capital is running toward both the short-term potential for modestly better risk spreads and the longer-term opportunity to partner with reinsurers, insurers, and insureds to fuel assets under management and ultimately make insurance more available and affordable,” Willis Towers Watson says. “We see no end in sight to ILS growth as a long-term trend.”

Historically, following other major catastrophes, start-up insurance companies arose to fill the need to for new capital. After 9/11 and again after the devastating hurricanes of 2005, $11 billion and $10 billion of new capital, respectively, were raised.

But, given legal and regulatory requirements, infrastructure build-out, and staffing, those capital-raising processes typically took up to a year. By comparison, ILS funds can be raised in weeks.

“While it’s unclear if the losses of 2017 will stir demand for a new class of start-up insurers, it is clear that the swift fluidity of alternative capital has fundamentally changed marketplace dynamics,” the report says. “And the changes are permanent.”

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