Insurance rate hikes expected to moderate as capacity risesPosted On: Nov. 16, 2021 11:48 AM CST
Commercial insurance buyers in North America should see relief from the hard market next year with a few lines seeing flat renewals or even decreases, according to a report from Willis Towers Watson PLC.
Several lines, such as cyber liability, though, remain tough and buyers should still expect significant rate increases, according to the report released Tuesday.
The hard commercial insurance market continues but with a deceleration in rate increases, Jon Drummond, head of broking, North America, said in the report.
“Supply, in the form of additional capacity provided by insurance carriers, is up, and a rise in supply is doing what it does best: lowers prices,” he said.
For 2022, property rates are expected to rise 2% to 10%; general liability rates are forecast to increase 5% to 12.5%; auto rates will likely be 5% to 15% higher; excess casualty will be flat to 15% higher for low to moderate hazard risks and 15% to 30% higher for high hazard; workers compensation rates will likely be down 2% to up 4%, according to the Willis report. Most of the lines saw higher rate increases last spring.
Directors and officers liability primary rates for public companies will be flat to up 25% and flat to up 20% for excess layers; private company D&O rates will be 5% to 40% higher, according to the report.
Cyber liability rates are expected to surge 50% to 150% next year, as cyber insurers continue to limit their exposure to ransomware losses, the report said.
In other lines, employment practices liability rates are expected to increase 10% to 30%; errors and omissions rates are expected to rise 5% to 20%, depending on the profession insured; construction general liability and auto liability rates will likely climb 5% to 15%; and medical malpractice primary rates are expected to rise 5% to 10%.