Insurance Premiums Rise for 25 Quarters, "Real" Growth in Question: MarshBerry

Since 2018, the insurance industry has experienced a consistent rise in premium costs due to inflation, stricter underwriting criteria, and reduced insurer capacity. By December 31, 2023, commercial property and casualty premiums had increased for 25 consecutive quarters, ending Q4 2023 with a 7 percent rise from the previous quarter, according to a recent MarshBerry Waypoint report providing industry insights.

The report said this hard market has challenged brokers to place affordable coverage for clients, but it has also led to 6 years of solid year-over-year organic growth for many brokerages, often reaching double digits. However, MarshBerry believes that much of this growth stems from rate increases and exposure growth in existing business, not from strategic business efforts.

In 2023, the average firm achieved an organic growth rate of 10.2 percent, with 7 percentage points of this growth driven by premium rate increases and exposure base growth, leaving only 3.2 percent as "real" organic growth, the report found.

Top-performing firms, which saw an average organic growth of 18.6 percent in 2023, achieved this through strategic decisions, superior retention, and a strong sales culture, MarshBerry said. These firms demonstrated "real" growth of 11.6 percent.