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Commercial insurance prices rose by an average of 10% across all size accounts, but troubled lines like cyber and umbrella saw much higher increases, according to The Council of Insurance Agents & Brokers’ first-quarter Commercial P/C Market Survey released Friday.
The 10% average increase compares with a 10.7% increase in the fourth quarter and 11.7% in the third quarter of 2020, a sign that the pace of premium increases continues to moderate, according to the Washington-based trade association.
Large accounts saw the biggest rise, recording an average increase of 12.9%, while medium accounts had an average increase of 10.9%. Small accounts saw a 6.3% increase.
Premiums increased for all lines of business, including workers compensation, for the fourth consecutive quarter, but the increases were highest for umbrella and cyber.
Cyber saw an average increase of 18%, compared with 11.1% in the fourth quarter and 7.7% in the third quarter of 2020. “Cyber changed quickly in Q1. Numerous clients received 80%+ increases,” said one broker in the Southeast cited in the report.
Despite the significant increase, 93% of respondents reported a rise in demand for cyber insurance in the first quarter.
Umbrella saw an average price hike of 19.7%, down from 21.3% in the fourth quarter but reflecting continued issues that brokers have with this line of business.
Underwriting tightened significantly for troubled lines and nearly 80% of respondents reported a decrease in capacity for umbrella, and 73% the same for cyber.
Directors & officers, commercial property, and employment practices liability were the other three lines of business that reported average premium increases of more than 10%, at 15.1%, 12% and 10.8%, respectively.
Brokers reported similar, if less pronounced, increases to deductibles, reductions in limits, and shrinking capacity for most lines. “Disciplined underwriting continued,” said one respondent from the Northeast.
“Carriers continued to push for rate increases in umbrella, noting factors such as nuclear verdicts or social inflation, and began to pull back on cyber risk in the face of rapidly increasing claims from ransomware and attacks that exploit the remote workforce,” Ken A. Crerar, president-CEO of The Council said in a statement.
The COVID-19 pandemic’s impact was still being felt in the first quarter, with pricing, availability of coverage, renewals and underwriting trends all affected, according to most respondents.
More insurance and risk management news on the coronavirus crisis here.
Commercial property/casualty rates continued to rise in the fourth quarter of 2019, with 7.5% average increases across all lines, according to the Council of Insurance Agents & Brokers’ latest pricing survey.