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Commercial insurance markets are seeing rate increases, capacity reductions and tighter underwriter scrutiny as an already hardening market reacts to the impacts of COVID-19-related losses, according to a report Monday from USI Insurance Services LLC.
Most lines, therefore, are expected to see continuing rate increases in the fourth quarter.
Property lines are seeing rate increases from 5% to 30% or more depending on loss history and catastrophe exposure.
Primary general casualty and product liability are up 10% to 20% while umbrella and excess liability are up as much as 25% for middle market accounts but as much as 75% for large accounts.
Primary auto liability for fleets over 200 are up 10% to 20%. Auto liability for smaller fleets is flat after seeing double-digit increases in the first half of 2020.
Public company directors and officers coverage can be up as much as 100% while private company and not-for-profit D&O is seeing smaller rises of 10 to 60%.
Executive and professional risk markets are seeing increases of 5% to 20%. Workers compensation coverage ranges from flat to down 10%, USI said.
A variety of factors is contributing to continued upward rate pressure, USI said.
“Continued uncertainty from potential COVID-19 related cases, higher than normal judgments, developing catastrophe losses, and additional factors have insurers raising rates, lowering capacity, limiting or transferring risk, and taking a harder look at risk profile,” USI said. “Even insureds with a lower risk profile are facing much closer underwriter scrutiny as well as higher rates and retentions.”
The rising market is forecast to extend into next year, USI said. “As the full extent of claims related to COVID-19 and other events remain to be seen, these market trends will continue through Q4 and likely well into 2021.”
More insurance and risk management news on the coronavirus crisis here.
Germany-based Munich Reinsurance Co. expects reinsurance rates to harden further at the upcoming January renewals, Artemis reports. Low interest rates are hurting reinsurance profits, while the COVID-19 pandemic is serving as a wake-up call for the industry regarding systemic risks, the reinsurer said.