Advisen Front Page News
- Monday, February 7, 2022
Reasons to be 'hopeful' even as rates keep rising: Risk Strategies
Advisen
Reasons to be 'hopeful' even as rates keep rising: Risk Strategies
By Erin Ayers, Advisen
Property/casualty insurance rates will keep rising in 2022, but there is room for optimism as rate increases continue easing and new capacity comes into the market, according to an outlook from Risk Strategies.
“Despite 2021’s challenges, there is reason to be hopeful in 2022, as we see some signs of stabilization,” said John Mina, CEO of Risk Strategies in the report, adding, “Sustained rate increases have attracted new entrants, and over time underwriting capacity will expand.”
In 2021, buyers of cyber, property, excess liability, directors and officers (D&O), and commercial auto saw the most pressure on rates. Stringent underwriting accompanied rate increases. Going forward, Risk Strategies predicted continued pressure on some lines, including cyber, where increases were estimated at over 30% at minimum; umbrella liability for transportation firms with increases between 25% and 100%; and high-risk property accounts (projected to rise 25% or higher).
While high-quality accounts will see better pricing and coverage options from the traditional insurance market, the report observed more interest in alternative risk transfer.
“More business owners, especially those with strong risk management programs and low claims history, are exploring alternative risk sharing options such as captives as a long-term option to reduce their total cost of risk and control premiums,” Mina said.
