View this article online: https://www.insurancejournal.com/news/national/2023/05/18/721416.htm
Commercial property premiums increased more in the first quarter than they have in more than 20 years as the first three months of the year marked the 22nd straight quarter of overall premium increases, at 8.8%, according to the newest survey from The Council of Insurance Agents & Brokers.
Changing roles with cyber as the insurance market’s typical “outlier” to recent premium-increase moderation, commercial property premiums spiked 20.4% in Q1 – the first time since 2001 that commercial property recorded an increase of over 20%, according to Q1 Commercial Property/Casualty Market Index respondents, one of which said the property market hardened quicker than anyone can remember.
Inflation and natural catastrophe risk were the main drivers of the Q1 premium increase in commercial property. Loss-of-use is being negatively affected by supply chain issues, increasing repair costs.
Related: Hard Commercial Property Market to Linger as Property Owners Take On More Risk
More than 60% of respondents also reported an increase in the frequency of commercial property claims from weather events.
Brokers taking the survey said insurers pushed for updates to replacement values and recent improvements, with tightening in catastrophe exposed property. Eighty-five percent said they saw a reduction in capacity for property, with nearly half describing the reduction as “significant.”
Meanwhile, cyber premiums during Q1 went up 8.4% as opposed to increases north of 20% a year ago and 15% last quarter. CIAB said about a third of respondents said there was also an increase in capacity for cyber, “suggesting carrier attitudes towards underwriting the line may have started to shift.”
Related: Clients Buy Higher Limits as Q1 Cyber Increases Follow Moderation Trend: Marsh
CIAB said it “seems like that focus on incentivizing insureds to adopt a more aggressive cyber risk management strategy has had some success. In Q1 2022, the number of respondents reporting a rise in cyber claims was 72%. By this quarter, that number had fallen to just 39%.”