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Advisen Front Page News - Thursday, January 6, 2022

Rate relief on the way in 2022 for some - but not all -- insurance buyers: USI


Rate relief on the way in 2022 for some - but not all -- insurance buyers: USI

By Erin Ayers, Advisen

As the commercial property-casualty insurance market stabilizes, rate increases appear to be slowing, with some organizations even seeing rate decreases in the near future and others facing “enormous challenges,” according to USI Insurance Services’ latest market outlook.

Buyers with good loss histories can expect more moderate rate increases in property, general liability, primary auto, workers compensation, and some professional lines, the report predicted. However, excess auto will remain a challenge for any buyers, with expected increases over 40%. Cyber remains in a class of its own, with 40% to 50% increases for optimal risks and 50% to 100% and rising for more challenged accounts.

“Organizations that work closely with their brokers to improve their quality of risk will differentiate themselves to the insurance marketplace and position themselves to receive favorable outcomes,” said Robert Meyers, senior vice president and property & casualty leader for USI. “Some insurance buyers, including ones in certain geographic areas, industries, and other risk categories, are exceptions to these positive trends and will continue to face enormous challenges.”

He added, “While we continue to see costs increase in some coverage lines, the overall stabilization and improved capacity across the insurance market are reasons for optimism.”

Accounts with poor loss history may be in for sticker shock on property (with average increases over 15%); and primary auto (up 20% to 30% or more), USI predicted.

For non-catastrophe-exposed property accounts with good loss history, USI forecast average rate changes ranging from 5% decreases to 5% increases. CAT-exposed property with good loss histories are more likely to see increases between 5% and 10%, while more challenged accounts are facing increases upwards of 15%.

On general and products liability, USI projected “less severe” rate increases. For commercial auto, the market has seen some flattening-out of rates due to “dormant” insurers reentering the market and some new players utilizing telematics and usage-based coverage.

Excess liability, still a difficult space, should begin to see more competition for market share in 2022, for buyers with solid risk management programs.

“Those buying limits of $25 million or less should experience less volatility than those purchasing more. However, we do not expect to see an environment of rate decreases becoming the norm anytime in 2022,” noted USI.

Another long-term challenging sector has been the directors and officers liability market, USI noted, but the line continues to stabilize, with primary rates either flat or rising up to 20% for both public and private companies and nonprofits. However, insurers are also shying away from firms with “the most concerning risk profiles” -- cryptocurrency, biotechnology, life sciences, healthcare, and technology industries, cannabis, and those with hefty losses. They are also looking much more closely at environmental, social and governance (ESG) issues, and return-to-work strategies.

“D&O insurance buyers should expect continued underwriting scrutiny and a more rigorous renewal process, especially around ESG frameworks,” said USI.

Senior Editor Erin Ayers can be reached at