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Price hikes expected to continue in 2022: Alera


Commercial insurance pricing will continue to trend upward in 2022 but at a slower rate than in 2021 and with great variation between lines, Alera Group Inc. said Tuesday.

The broker said it sees moderation in the rates of increase.

“The rate of increase appears to be slowing in several lines, including general liability and commercial auto. There is also some softening of property rates in non-catastrophe-prone areas. However, businesses in catastrophe-prone areas will continue to face pricing challenges.”

Increasing weather and climate-related disasters are driving markets.

In 2020, there were 22 separate billion-dollar weather and climate disasters across the U.S., according to the National Oceanic and Atmospheric Administration, topping the previous annual record of 16 events in 2017, Alera said.

As of third-quarter 2021, there have already been 18 weather or climate disaster events in the U.S., with losses exceeding $1 billion each. “These losses continue to affect property insurance rates and coverage availability,” Alera said.

Cyber lines also face challenges with cybercrime growing “exponentially” and costs of global cybercrime expected to hit $10.5 trillion annually by 2025, according to research and publishing firm Cybersecurity Ventures.

“The spike in cybercrime claims in 2020 and 2021 is leading insurers active in this line to increase pricing and tighten underwriting standards, coverages and forms,” Alera said.

Alera, the nation’s 17th-largest broker of U.S. business, according to the latest Business Insurance rankings, also cited social inflation as driving up liability and commercial auto rates and the unknown impact of claims related to COVID-19 as factors affecting pricing in 2022.