Thank you for tuning in. As you may know, each year, Wells Fargo Insurance publishes an Insurance Market Outlook, which provides a look forward to the coming year. In the report, our knowledgeable national practice leaders share their thoughts on 18 different coverage areas to give you the timely information you need to understand: today's market, market capacity, topical issues, and what's expected for the year ahead. Casualty and alternative risk national practice leader, Doug O'Brien, is here along with Meredith Schnur, professional risk national practice leader, to share some highlights of the report.
>> Well, I'm pleased to share that as we predicted in our 2016 Market Outlook, 2016 was a buyer's market for both property and casualty commercial insurance and affiliated lines. The majority of insureds experienced medium to high single-digit to low double-digit rate decreases. Abundant market capacity and competition for new business helped drive prices down overall for the majority of insureds, despite an environment of level or declining treasury yields.
All told, we believe insurers will sustain underwriting profitability, resulting in the continuance of a buyer's market. Buyers of guaranteed-cost or low-deductible programs will experience lower reductions and likely single-digit increases in 2017, compared to buyers of large deductible and retention programs. Visit our website at wfis. wells fargo. com to read our full 2017 Insurance Market Outlook,with information on specific coverage areas, trends, and premium pricing forecasts.
>> Now, looking forward to 2017, experts predict the U. S. economy will continue to expand. Job growth means higher payroll, sales, more autos owned or leased for business purposes,increased construction, property expansion, and more, which will increase gross premiums underwritten. The majority of insureds will continue to see reductions, just not as high as in prior-years. We are beginning to see the pace of reductions slowing, and the market stabilizing somewhat. So, what are some of the specific factors and trends that will affect the 2017 market,Doug?
>> The specific factors and trends that will affect the 2017 market run a very wide gamut,but one we'll likely continue to hear about in 2017 is cyber liability, as noted by mycolleague Meredith Schnur, professional risk national practice leader.
>> That's right, Doug. Cyber liability insurance, which is a newer product, continues to expand in scope as have the cyber attacks and high profile data breaches they are intended to cover. Impostor fraud is also growing, further increasing the focus on cyber crime. Aggregation is a concern for cyber carriers, because a single data privacy event could result in multiple claims reported to the same insurance companies.
>> Some of the other notable factors and trends to watch for the 2017 market include: a continuedrise in medical inflation; expected changes to the Affordable Care Act,which may make coverage less available or increase costs, and which may drive injured people to file workers' compensation claims in lieu of healthcare claims; terrorist events increasingly occurring on U. S. soil; Florida workers' compensation premiums were raised 15% following a court ruling on negotiated fee agreements, although that hike is now delayed due to another court ruling; the elimination of the option for employers to opt out of the Workers' Compensation Act in Oklahoma, which will likely drive up employer costs;an increase in securities class action filings; and a continued carrier focus on data analytics in the underwriting process.