Rate hikes for commercial lines of insurance are slowing to single-digit increases or even flat renewals, according to broker WTW’s Marketplace Realities spring update.
The exception, as it has been, is cyber insurance. Buyers here keep seeing even higher increases. Rates hikes of 100% or 200% are “commonplace” in the cyber market, WTW said, due to claims activity, regulations and a complicated risk environment. Cyber insurers continue to limit exposure to ransomware losses and other potential widespread cyber events so buyers should prepare to prove they have taken certain cybersecurity measures to avoid huge increases or non-renewals.
Certain carriers are leaning more on cybersecurity consultants to understand the risk, and are using third-party technologies to scan networks and reveal vulnerabilities of applicants. Also, the marketplace is increasingly concerned with systemic losses, WTW reported.
For other lines of business, rates are stabilizing. Jon Drummond, head of broking North America, said: “While we continue to see rate increases across most lines of business, the silver lining is that the increases are decelerating and beginning to stabilize.”
Still, there is some uncertainty. WTW said the military conflict in Ukraine, supply chain issues, interest rates, and inflation will create volatility. The broker predicted that higher interest rates and rising inflation will be “a part of the economic environment for awhile.”
Looking ahead at some notable 2022 price predictions, WTW said rates for directors and officers – private and public – could increase as much as 20% at renewal, but some D&O buyers could see some rate decreases for the first time in while. When considering D&O risk, carriers are looking at financial strength; environmental, social and governance (ESG) concerns; industry; claim history; COVID-19 resilience; regulatory uncertainty; loss-cost escalation; cyber and privacy; event-driven claims; and systemic exposures, WTW reported.
In terrorism and trade credit, WTW’s previous predictions of small decreases have changed to predictions for flat renewals at best for trade credit, and increases in double digits for many buyers of terrorism and political violence cover.
Related:
Rates Up Again in Q1 as Signs May Point to ‘Stronger Increases’: MarketScout
Topics Cyber Agencies Commercial Lines Business Insurance Willis Towers Watson
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