Event: The Council of Insurance Agents & Brokers (“CIAB”) released its Q3/22 P&C Market Survey.

Our Take: The average premium increase across all account sizes was 8.1% in Q3/22 versus 7.1% in the prior quarter. Rate increases remain positive across most lines, albeit at a more moderate pace relative to 2020. In our view, the strength and persistence of inflationary pressures and associated impact on loss cost trends should help sustain a favourable pricing environment for longer than it otherwise might have endured. A costly Atlantic hurricane season may also help sustain the strength of rate increases, particularly across catastrophe-exposed property lines. Although positive rate increases are supportive of top-line growth (and consequently growth of the investment portfolio), we feel that the more important implication of higher renewal pricing is the maintenance or improvement of rate adequacy across lines. This is particularly important for Trisura’s (TSU.TSX, Outperformer) U.S. fronting model where the vast majority of insurance risk is ceded, but the appetite for premiums from reinsurers is partly driven by projected underwriting margins.