Report: External Forces To Affect 2016 US Property-Casualty Insurance Market

This is the time when predictions for the coming year emerge, and for US property-casualty insurers, EY suggests "2016 will be a year of ongoing disruptive change."

In its 2016 US property-casualty insurance outlook report, EY ranks six major outside elements that it sees impacting the market in 2016. The degree of impact varies with 10 representing the highest impact, and 0 representing the least impact.

The major rankings outlined in the report, along with an explanation of each, are as follows.

Technology (Ranked 10)

Digital technologies are "redefining the insurance market" and will affect most business areas and pricing models. 

Pricing (Ranked 9)

Both personal and commercial sectors will feel the effect of greater competition, more pricing transparency, improved analytics, and the appeal of "pay-as-you-go."

Customer Expectations (Ranked 8)

Customers are demanding more personalized experiences from insurers, and there is more opportunity for online comparison shopping.

Economy and Interest Rates (Ranked 6)

The outlook is for modest economic growth and only a slight increase in U.S. interest rates. Global volatility will result in more uncertainty and "downside" risks.

Regulations (Ranked 5)

The potential implications of changing regulations in 2016, with greater impact in 2017 after the U.S. elections, will need to be assessed and addressed by insurers.

Catastrophes (Ranked 2)

After a long period of relative calm, a large loss event could be more likely, but only a major, unexpected event or events can be market-changing.

The EY 2016 predictions do not include any specific mention of captive insurance trends. However, most of the external impacts outlined in its report will affect the captive insurance industry.