Balance With ‘Micro-Actions’ in Commercial Market But Milton Could Disrupt

WTW characterized commercial insurance rates as balances and stable but, as Hurricane Milton approached, the broker warned of upcoming disruption.

“The current state of affairs might only be one major hurricane away from being upended, and with Milton knocking on the door, the probability of disruption is growing,” said Jon Drummond, head of broking in North America, in a statement released hours before Milton made landfall in Florida as a Category 3 hurricane.

In its Marketplace Realities report published on Oct. 4, which offers 2024 price predictions on 30 commercial lines of business, WTW said rates have thus far been balanced and stable.

“The industry has not categorically rewritten its position on any one line of business, but rather has taken micro-actions reacting to emerging trends.” said Drummond.

Reinsurers continue to bring back capital to first-party property risk—with some expanded appetite via insurance linked securities for catastrophe-exposed risk. Rates on catastrophe-exposed property are expected to go down 5% to up 10%.

Cyber and financial markets remain relatively soft with plenty of capital and capacity. Cyber rates are expected to stay at least flat for the rest of 2024, WTW said. However, there is some focus in rate adequacy in mid-excess directors & officers liability.

“After several years of rate deterioration, historic and new markets are beginning to cite an inability to support further reduction, particularly in excess layers,” WTW said of D&O. The broker expects prices here land in the range of -10% to flat for both primary public and private D&O.

The most disruption in 2024 is in umbrella & excess thanks to rising litigation costs and growing concerns such as PFAS, the broker noted.

Topics Commercial Lines Business Insurance Tech